Which of the following is an expanded form of calculating return on investment?
A)Profit margin ratio × Asset turnover ratio
B)Net profit ratio × Inventory turnover ratio
C)Gross profit ratio × EVA
D)Asset turnover ratio × inventory turnover ratio

Question

Quizplus · Accepted Answer

Return on investment can be expanded as Profit margin ratio multiplied by Asset turnover ratio. Profit margin ratio measures the net income earned by the business for every dollar of revenue generated, whereas asset turnover ratio measures the efficiency with which a company is using its assets to generate sales. Together, they give a clearer picture of how effectively a company is using its resources to make a profit.

Which of the Following Is an Expanded Form of Calculating