Which of the following is the correct formula for calculating return on investment?
A)Net profit ÷ Sales
B)Gross profit ÷ Sales
C)Operating profit ÷ Average total assets
D)Earnings available to stockholders ÷ Number of outstanding stock.

Question

Quizplus · Accepted Answer

Return on investment (ROI) is calculated as operating profit divided by average total assets. This provides a measure of how efficiently a company is using its assets to generate profits. Options A, B, and D are all related to profitability, but do not take into account the assets used to generate that profit.

Which of the Following Is the Correct Formula for Calculating