Roberts Corporation has an ROI of 23%, total assets of $5,250,000, and current liabilities of $950,000. What is Roberts Corporation's operating income?
A) $218,500
B) $1,207,500
C) $4,130,435
D) $22,826,087

Question

Quizplus · Accepted Answer

ROI (Return on Investment) formula is:

ROI = (Operating Income / Total Assets) x 100

23% = (Operating Income / $5,250,000) x 100

Operating Income = $1,207,500

Now, as per the question, the operating income will be used to calculate the current ratio:

Current Ratio = Current Assets / Current Liabilities

We do not have the information of current assets, so we cannot calculate the current ratio. Therefore, option (B) is the best choice as it provides the required information to calculate operating income.

Roberts Corporation Has an ROI of 23%, Total Assets of $5,250,000