ROI & ROA Flashcards
1
Q
ROI
A
1) Income/Investment Capital
or
2) Profit Margin X Investment Turnover
2
Q
Invested Capital
A
Debt + Equity
3
Q
Alternate ways to calculate Income/Investment Capital
A
Net Income/Average Assets
or
Average PP and E + Average Weighted Capital
4
Q
Calculating Net Income
A
Sales minus Variable Costs minus Fixed Costs
5
Q
Long Way to Calculate ROA
A
Net Income/Sales X Sales/Average Assets
6
Q
Short way to Calculate ROA
A
Net Income/Average Total Assets
7
Q
Profit Margin
A
Return on Investment divided by Asset Turnover
Net Income divided by sales
