Which of the following ratios can managers use to break down return on investment (ROI)for improving performance?
A)Inventory turnover and gross margin ratio.
B)Inventory turnover and profit margin ratio.
C)Operating profit margin and EVA.
D)Operating profit margin and asset turnover.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Managers can break down ROI by using operating profit margin and asset turnover ratios. Operating profit margin measures how much profit a company generates from each dollar of sales, while asset turnover measures how efficiently a company uses its assets to generate sales. By analyzing these ratios, managers can identify areas for improvement in performance and make strategic decisions to increase ROI. The other answer choices involve different ratios that may not be directly related to ROI.

Which of the Following Ratios Can Managers Use to Break