THN Pty Ltd reported operating profit 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) is calculated as operating profit divided by average operating assets, multiplied by 100%. In this case, THN's ROI is (30,000/40,000) x 100% = 75%. Therefore, choice C is true. Choices A, B, and D cannot be determined based on the given information.

THN Pty Ltd Reported Operating Profit of $30,000, Revenue of $50,000