View Full Version : Profit Margin, ROI, Turnover
rebel_sweetie_02
Oct 9, 2006, 08:13 PM
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
Oct 9, 2006, 09:07 PM
ROI = (Gain of Investment - Cost of Investment) / Cost of Investment
Profit Margin = Net Income / Revenue
mollybear
May 22, 2008, 08:56 AM
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
May 22, 2008, 05:16 PM
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
Aug 22, 2009, 11:23 AM
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