In: Accounting
What is the Return on Investment for the division below
Division | ||
Operating Income | $300,000 | |
Total Assets Jan 1 | $900,000 | |
Total Assets Dec 31 | $850,000 |
Return on Investment = Net Operating income / Average Assets x 100
= $300,000 / $ 875000 x 100
= 34.2857% or
= 34.29%
Average Assets = ($900,000 + $850,000) / 2
= $875,000