Which of the following statements is true?Return on investment (ROI) equals margin multiplied by sales.When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets.An advantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.

Return on Investment (ROI) is a measure which is used to check the ability of the company, in…

Answered: Which of the following statements is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following statements is true?

Return on investment (ROI) equals margin multiplied by sales.
When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets.
An advantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income.

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