Calculating Return of Investment: Example Problem

Using the formula Rate of return on investment) = Profit margin x Investment turnover
Calculate the return of investment for the following division results:
Sales $8,928,000
Income from operation $650,000
Profit margin $ 4,385,000

a) Margin __________/_______________=______________
Investment turnover _________/____________=_______________
Return on investement _________x___________=____________

b) If the company expects a ROI of 13? Has the company met the targeted ROI? Yes or no and why?

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...nvestment Turnover = Sales/Assets = 8,928,000/4,385,000 = 2.04
Return ...