A factor in determining the rate of return on investment--the ratio of sales to invested assets--is called:
A) profit margin
B) indirect margin
C) investment turnover
D) cost ratio

Question

Quizplus · Accepted Answer

Investment turnover is the ratio of sales to invested assets, and it measures the efficiency of a company in using its assets to generate sales. A higher investment turnover indicates that a company is generating more sales per dollar of invested assets, which can lead to a higher rate of return on investment. Profit margin is a different financial ratio that measures the percentage of revenue that is left over after deducting expenses, and it does not take into account the amount of assets invested. Indirect margin and cost ratio are not commonly used financial ratios.

A Factor in Determining the Rate of Return on Investment--The