The return on investment is usually considered the most popular approach to measure performance because ________.
A) it blends all the ingredients of profitability into a single percentage
B) once determined, there is no need to use it with other measures of performance
C) it throws light on the company's working capital
D) it measures the cash balance of the company in the most efficient manner

Question

Quizplus · Accepted Answer

The return on investment combines various elements of profitability, such as net income and assets, into a single percentage. This makes it a popular method of measuring performance as it provides a comprehensive overview of the company's profitability. It does not relate to measuring the company's working capital or cash balance. While it is useful on its own, it may also be combined with other measures of performance for a more thorough analysis.

The Return on Investment Is Usually Considered the Most Popular