A company had the following results last year: sales,$700,000;return on investment,28%;and margin,8%.The average operating assets last year were?

Question

Quizplus · Accepted Answer

The return on investment (ROI) is calculated as (Net Operating Income / Average Operating Assets). Given ROI is 28% and margin is 8%, the Net Operating Income is 8% of sales, which is $56,000. Using the ROI formula: $56,000 / Average Operating Assets = 0.28, solving for Average Operating Assets gives $200,000.

A Company Had the Following Results Last Year: Sales,$700,000;return on Investment,28%;and