Asked by RMerline Benjamin on Jul 02, 2024
Verified
A change in sales has no effect on margin and turnover.
Margin
Net operating income divided by sales.
Turnover
Sales divided by average operating assets.
- Recognize the factors that affect ROI and how changes in sales, expenses, and assets influence it.
Verified Answer
AA
Ahmed Ashraf6 days ago
Final Answer :
False
Explanation :
A change in sales can have an effect on margin and turnover. For example, if sales increase but cost of goods sold remains the same, margin will increase. Similarly, an increase in sales can lead to a higher turnover. However, it is also possible for sales to change without affecting margin and turnover, such as if there is a shift in sales from one product to another with the same margin and turnover.
Learning Objectives
- Recognize the factors that affect ROI and how changes in sales, expenses, and assets influence it.
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