WHAT IS COMPANY Y’S OPERATING INCOME RETURN ON INVESTMENT?

Company Y has sales of $2,250,000, the sum distinction of $825,000, sum handling costs of $620,000, income taxes of $74,800, as well as sum resources of $995,000.

a.) 36.67%
b.) 14.32%
c.) 20.60%
d.) 4.99%

Please explain:

{ 1 comment… read it below or add one }

FatHalo September 25, 2010 at 4:42 pm

The OI ROI is = OI/TA (operating income devided by total assets).
OI = Gross Profit – Operating costs = 825 – 620 = 200
Therefore OI ROI = 200/995 = 20.1%

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