Home / Questions / Return on investment is often expressed as follows Income Revenues Income Investment Inv...
Return on investment is often expressed as follows:
Income Revenues Income
–––––––––––– = –––––––––––– × –––––––––– Investment Investment Revenues
Required
1 What advantages are there in the breakdown of the computation into two separate components?
2 Fill in the following blanks:
Companies in same industry
A B C
Revenue |
€1 000 000 |
€500 000 |
? |
Profit |
€100 000 |
€50 000 |
? |
Investment |
€500 000 |
? |
€5 000 000 |
Profit as % of revenue |
? |
? |
0.5% |
Investment turnover Return on investment |
? ? |
? 1% |
2 ? |
After filling in the blanks, comment on the relative performance of these companies as thoroughly as the data permit.
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