Pierre's Ice Cream Company produces ultra-rich ice cream,which it sells in the Cleveland,Ohio area.Last year,it managed to exceed its target return on investment (ROI)for the current fiscal year.The following results were found on its financial statements:
$\begin{array}{lrll}
\text { Gross Revenues: } & \$ 250,000 & \text { Total Assets: } & \$ 500,000 \
\text { Gross Profits: } & \$ 100,000 & \text { Total Liabilities: } & \$ 200,000 \
\text { Net Profits after Tax: } & \$ 50,000 & \text { Owner's Equity: } & \$ 300,000
\end{array}$
What was the actual ROI for Pierre's Ice Cream Company?

Question

Quizplus · Accepted Answer

The Return on Investment (ROI) is calculated as $ \frac{\text{Net Profits after Tax}}{\text{Total Assets}} \times 100 $. Using the given figures, $ \frac{\$50,000}{\$500,000} \times 100 = 10\% $.

Pierre's Ice Cream Company Produces Ultra-Rich Ice Cream,which It Sells