Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Sign up and see all textbooks for free! Illustration

Q19RQ

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 1355

Answers without the blur.

Just sign up for free and you're in.

Illustration

Short Answer

What does ROI measure?

ROI measures percentage return earned on the average total assets of the business entity.

See the step by step solution

Step by Step Solution

Step 1: Meaning of ROI

ROI, or return on investment, is a pivotal budgetary measurement that gauges an investment's benefit or loss about its starting outlay. It measures how effectively business’s utilize the assets.

Step 2: Calculation of ROI

ROI is measured by dividing operating income by average total assets. Alternatively, profit margin ratio and asset turnover ratio can be multiplied to calculate it.

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.