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Return on investment is often expressed as follows Income Revenues Income Investment Investment Revenues Required 1 What advantages are there in the break

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.

Jun 19 2020 View more View Less

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