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Question
Select the appropriate answer from the alternatives given below & rewrite the completed statement
The relationship between net profit before Tax, interest and dividend and capital employed is known from _____________.
Options
Current Ratio
Quick Ratio
ROI
ROCE
Solution
The relationship between net profit before Tax, interest and dividend and capital employed is known from ROI.
Explanation: Return on investment, i.e. ROI, is based on capital employed, i.e. net profit before tax, interest and dividend divided by capital employed, where capital employed reflects the total amount invested in the business.
While quick ratio and current ratio reflect the liquidity of the business, ROI reflects the profitability.
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RELATED QUESTIONS
State whether following statement is true or false :
ROI is calculated on ownership capital only.
Explain the following :
ROI.
Solve the following:
If total capital invested by company is Rs 5,00,000 and net profit before interest, tax and dividend is Rs 1,60,000, what is ROI?
Explain return on investment (ROI).
Explain the Return On Investment (ROI)
