Profitability can be defined as the rate of return that the firm makes on its invested capital,which is calculated by dividing the total sales of the firm by total invested capital.

Question

Quizplus · Accepted Answer

While profitability does refer to the rate of return a firm makes on its invested capital, it is calculated as net income divided by total invested capital, not total sales divided by total invested capital.

Profitability Can Be Defined as the Rate of Return That