Shandling Company had operating income of $70,000, sales of $218,750, and turnover of 0.5. What is Shandling's ROI?
A) 32%
B) 50%
C) 16%
D) 64%
E) Cannot be determined from this information.

Question

Quizplus · Accepted Answer

ROI = Operating Income/Sales x Sales/Total Assets
Turnover = Sales/Total Assets
Therefore, ROI = Operating Income/Sales x Turnover
= $70,000/$218,750 x 0.5 = 0.16 or 16%

Shandling Company Had Operating Income of $70,000, Sales of $218,750