Return on Owner's Investment (ROI) Flashcards
1
Q
ROI
A
A profitability indicator that measures how effectively a business has used the owner’s capital to earn profit
2
Q
What does ROI assess
A
How profitable the owner’s investment has been by measuring how many cents profit the business earns for every dollar invested by the owner
3
Q
Formula to calculate ROI
A
Net Profit/Average Owner’s equity x 100
