Return on investment (ROI) is commonly expressed in each of the following ways, except Blank______.Multiple choice question.ROI = Net income / ((Beginning of year total assets + end of year total assets) / 2)ROI = Operating income / Average operating assetsROI = Net income / Average total assetsROI = Net income / Average stockholders' equity
Question
Return on investment (ROI) is commonly expressed in each of the following ways, except Blank______.Multiple choice question.ROI = Net income / ((Beginning of year total assets + end of year total assets) / 2)ROI = Operating income / Average operating assetsROI = Net income / Average total assetsROI = Net income / Average stockholders' equity
Solution
The correct answer is: ROI = Net income / Average stockholders' equity.
This is because Return on Investment (ROI) is typically calculated by dividing net income by the total investment (or total assets) to see how effective the company is at using its assets to generate profit. It is not typically calculated using average stockholders' equity.
Similar Questions
Return on investment (ROI) Blank______.Multiple choice question.is calculated by dividing the average net income for two years by the average total assetsis normally calculated using net income as the measure of the returnis sometimes referred to as return on equity (ROE)is calculated by dividing net income earned during the year by the total assets at the end of the year
Return on investment = Blank______.Multiple choice question.Average operating assets ÷ Net operating incomeSegment revenue ÷ Net operating incomeNet operating income ÷ Average operating assetsNet operating income ÷ Segment revenue
Select all that applyWhich statements correctly describe return on investment (ROI)? (Choose every correct answer.)Multiple select question.It is sometimes referred to as return on assets (ROA).It is normally calculated using net income as the measure of the return.It is normally calculated using average total assets as the measure of the investment.It is calculated by dividing the average net income by the average total assets.It is calculated by dividing net income earned during the year by the total assets at the end of the year.
ROI can be calculated as Blank______.Multiple select question.margin × turnoveraverage operating assets ÷ net operating incomenet operating income ÷ average operating assetsmargin ÷ turnover
Return on Investment (ROI) is a financial metric that measures:a.The profitability of an investment relative to its costb.The growth rate of a company's revenuec.The market value of a company's sharesd.The liquidity position of a company
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