Which of the following statements is incorrect?
A) Turnover is calculated by dividing sales by average operating assets.
B) Margin is a measure of the profits generated from sales.
C) Return on investment can be improved by increasing sales, decreasing expenses, or increasing the asset base.
D) If return on investment increases when sales increase, that change usually is due at least in part to the effect of fixed costs (operating leverage).

Question

Quizplus · Accepted Answer

Return on investment (ROI) can be improved by increasing sales or decreasing expenses, but increasing the asset base would typically decrease ROI, as it would increase the denominator in the ROI calculation.

Which of the Following Statements Is Incorrect