GK
ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
It is a triangular relationship in the sense that ROI = Profit margin x Asset turnover
|
|
|
It is a superior measure compared to the cash flow generated per share
|
|
|
It is an overall indicator of the profitability of an enterprise
|
|
|
It was first developed by Du Pont, USA
|
Detailed explanation-1: -Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage.
Detailed explanation-2: -Return on investment (ROI) is an approximate measure of an investment’s profitability. ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and finally, multiplying it by 100.
Detailed explanation-3: -Return on investment (ROI) or return on costs (ROC) is a ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time).
Detailed explanation-4: -The most common is net income divided by the total cost of the investment, or ROI = Net income / Cost of investment x 100.