Which of the following is an appropriate computation for return on investment?
A) Net income divided by sales
B) Net income divided by total assets
C) Sales divided by total assets
D) Sales divided by stockholders' equity

Question

Quizplus · Accepted Answer

Return on investment is calculated as the net income divided by the total assets. This ratio gives an idea about how well the company is utilizing its assets to generate profits. Options A, C, and D are not appropriate computations for return on investment.

Which of the Following Is an Appropriate Computation for Return