Which of the following is the correct mathematical expression for return on investment?
A) Sales margin $\div$ capital turnover
B) Sales margin - capital turnover
C) Sales margin $\times$ capital turnover
D) Capital turnover $\div$ sales margin

Question

Quizplus · Accepted Answer

Return on investment is calculated by multiplying the sales margin (the difference between revenue and costs) by the capital turnover (the amount of capital used to generate revenue). Therefore, the correct expression is Sales margin x Capital turnover. Option C represents this calculation in a correct manner.

Which of the Following Is the Correct Mathematical Expression for Return