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ROI is one of the most commonly used KPIs for evaluating an investment center's financial performance. It's a measure of profitability and efficiency. To determine
ROI is one of the most commonly used KPIs for evaluating an investment center's financial performance. It's a measure of profitability and efficiency. To determine what is driving a division's ROI, management often restates the ROI equation in its expanded form (profit margin ratio and asset turnover ratio). Celtic Co. has the following data. Calculate the asset turnover, profit margin, and ROI for Division B (Division A has already been calculated for you). Net Sales Operating Income Average Total Assets Asset Turnover Ratio Profit Margin Ratio ROI Division A 1,200,000 250,000 800,000 1.5 .21 .31 Division B 1,000,000 190,000 740,000
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