How do I find the ROI, profit margin, and turnover when the following is given:

$750,000- invested capital
$600,000-sales in one year
$96,000- profit in one year

CaptainForest

ROI = (Gain of Investment - Cost of Investment) / Cost of Investment

Profit Margin = Net Income / Revenue

mollybear

How do I find the ROI, profit margin, and turnover when the following is given:

$750,000- invested capital
$600,000-sales in one year
$96,000- profit in one year

morgaine300

From the info given, I suspect you're looking for the Dupont extended equation, which you should be able to find in your textbook:

ROI = profit margin x asset turnover

profit margin = net profit/sales

asset turnover = sales/assets (i.e. invested capital)

avinash_jpr

Invested Capital = Current Assets + Non-Current Assets = Total Assets = $750,000
Total Asset Turnover = Sales/ Total Assets = $600,000/$750,000 = 0.8
Net income = Net Profit = $96,000
Net Profit Margin = Net Profit / Sales = $96,000/$600,000 = 0.16
Return on Assets = Net Profit Margin * Total Asset Turnover = 0.16 * 0.8 = 0.128

So
Total Asset Turnover = 0.8
Net Profit Margin = 0.16
Return on Assets = 0.128