4 How is a company's return on investment calculated?Select one:a. By multiplying the margin by the turnover.b. By dividing the turnover by the average operatingassets.c. By dividing the margin by the turnover.ООd. By multiplying the turnover by the averageoperating assets.

Reference:Beattie, A. (2024, August 22). ROI: Return on Investment meaning and calculation Formulas.…

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...

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In a DuPont analysis, what are the components of return on assets?a. Net Profit Margin Ratio and Debt Ratiob. Net Profit Margin Ratio and Leverage Ratioc. Net Profit Margin Ratio and Asset Turnover Ratiod. Asset Turnover Ratio and Leverage Ratio
Why is the operating return on assets ratio also referred to as the operating returnon investment?
Discuss the following profitability ratios: Profit Margin, ROA-Return on Assets, ROI-Return on Investment, and the Gross Margin.
A. Which of the following is most closely associated with the cost of using assets? a. Asset utilization b. Sales revenue c. Proportion of debt and equity d. Average price B. Which of the following is most closely associated with the return on management’s use of assets? a. Cost of capital b. Mix of equity types c. Prime lending rate d. # of products sold
The return on total assets measures A. profitability by combining the effects of the profit margin and asset turnover. B.how efficiently a company uses its assets to generate sales. C.efficiency, profitability, and liquidity. D.liquidity.
Which of the following is the indicator of the rate at which company is earning profit? Select one: a. Margin of safety b. All options are correct c. Contribution margin d. Profit volume ratio
Which of the following is NOT a profitability ratio? Select one:a. Return on Equityb. Net Profit Marginc. Return on Assetsd. Average Collection Period
Which of the following scenarios can increase the return on assets? a. Increase the current and quick ratio b. Increase the profit margin, other things equal c. Other things equal, increase the amount of assets used d. Other thing equal, decrease the turnover of assets
In the DuPont system, the return on total assets (asset) is equal to (return on equity) × (financial leverage multiplier). (net profit margin) × (fixed asset turnover). (return on equity) × (total asset turnover). (net profit margin) × (total asset turnover).
Which of the following correctly orders the investment rules of average accounting return (AR), internal rate of return (IRR), and net present value (NPV) from the most desirable to the least desirable? a. IRR, AR, NPV. b. AR, IRR, NPV. c. NPV, AR, IRR. d. AR, NPV, IRR. e. NPV, IRR, AR.
Which of the following ratios measures short-term solvency? a. Current ratio b. Creditors' equity to total assets c. Return on investment d. Total asset turnover
Quick assets divided by current liabilities is the: Select one: a.Current ratio. b.Working capital ratio. c.Quick asset turnover ratio. d.Acid-test ratio.

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How is a company's return on investment calculated? Select one: a. By multiplying the margin by the turnover. b. By dividing the turnover by the average operating assets. c. By dividing the margin by the turnover. О О d. By multiplying the turnover by the average operating assets.