THN Corporation reported operating income of $30,000, revenue of $50,000, and average operating assets of $40,000 for a recent year. Which of the following is true?
A)THN has an adequate return on investment
B)THN's return on sales was 1.67
C)THN's return on investment was 75%
D)THN's return on sales was 80%

Question

Quizplus · Accepted Answer

Return on Investment (ROI) = Operating Income / Average Operating Assets * 100%
ROI = 30,000 / 40,000 * 100% = 75%
An ROI of 75% indicates that THN Corporation is generating significant returns on its investment. Neither the return on sales nor the adequate return on investment figures can be calculated based on the given information.

THN Corporation Reported Operating Income of $30,000, Revenue of $50,000