Question : What is the meaning of 'Investment' for the purpose of 'Return on Investment' ratio?
Option 1: Non-trade investment
Option 2: Trade investment
Option 3: Shareholder fund
Option 4: None of the above
Answer (1)
7th Jan, 2024
Correct Answer: Non-trade investment
Solution :
Answer =
Non-Trade Investment
For the purpose of the "Return on Investment" ratio, the term "investment" typically refers to non-trade investments, such as long-term investments in securities or properties. It excludes trade investments and shareholder funds, focusing on capital deployed for generating returns. It is assumed that all Non-Current Investments are trade Investments unless specified to be non-Trade Investments.
Hence, the correct option is 1.
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