The following information is available for the Heaven Company: $$\begin{array} { l r }
\text { Sales } & \$ 500,000 \
\text { Invested capital } & 312,500 \
\text { ROI } & 10 \%
\end{array}$$ The return on sales is _____.
A)10.000%
B)6.250%
C)1.000%
D)none of these answers is correct

Question

The following information is available for the Heaven Company: $$\begin{array} { l r } 
\text { Sales } & \$ 500,000 \
\text { Invested capital } & 312,500 \
\text { ROI } & 10 \%
\end{array}$$ The return on sales is _____.
A)10.000%
B)6.250%
C)1.000%
D)none of these answers is correct

Quizplus · Accepted Answer

Return on Sales (ROS) is calculated as ROI divided by the turnover ratio (Sales/Invested Capital). Here, ROI is 10%, and the turnover ratio is 500,000/312,500 = 1.6. Thus, ROS = 10% / 1.6 = 6.25%.

The Following Information Is Available for the Heaven Company Sales $500,000 Invested capital 312,500 ROI 10%\begin{array} { l r } \text { Sales } & \$ 500,000 \\\text { Invested capital } & 312,500 \\\text { ROI } & 10 \%\end{array} Sales Invested capital ROI ​$500,000312,50010%​

The Following Information Is Available for the Heaven Company $\begin{array} { l r } \text { Sales } & \$ 500,000 \\\text { Invested capital } & 312,500 \\\text { ROI } & 10 \%\end{array}$