BEC - Operations Management Flashcards
1
Q
Return on investments (ROI)
A
ROI = NI/avg investments OR NI/total assets
2
Q
Residual income
A
Residual income = Operating income - required rate of return [invested capital]
Invested capital = total assets - current liabilities
3
Q
Times interest earned (TIE)
A
TIE = operating profit / interest expense
4
Q
return on assets (ROA)
A
ROA = NI/avg total assets
5
Q
conversion costs include both direct labor and overhead
A
6
Q
A
