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Return on investment (ROI) is often expressed as follows: Income/Investment = Income/Revenues Revenues/Investment Requirements: 1. What advantages are there in the breakdown of the computation

Return on investment (ROI) is often expressed as follows:

Income/Investment = Income/Revenues Revenues/Investment

Requirements:

1. What advantages are there in the breakdown of the computation into two separatecomponents?

2. Fill in the blanks for the following table:

Companies in Same Industry

A

B

C

Revenues

$500,000

$200,000

?

Income

$150,000

$60,000

?

Investment

$250,000

?

$1,000,000

Income as a percentage of revenues

?

?

3.0%

Investment turnover

?

?

2

ROI

?

6%

?

After filling in the blanks, comment on the relative performance of these companies as thoroughly as the data permit.

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