Question : Which of the following is the correct answer:
A: Overall Profitability ratios are based on the investment.
B: It is calculated by dividing capital employed by operating profit.
Option 1: Option A
Option 2: Option B
Option 3: Both of the above
Option 4: None of the above
Answer (1)
22nd Jan, 2024
Correct Answer: Both of the above
Solution :
The term "return on investment" refers to the overall profitability ratio as well. It shows the rate of return on the total capital invested in the company. Other names for it include return on investment and return on capital employed. It is calculated by dividing operational profit by capital employed.
Hence option 3 is the correct answer.
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