Asked by Allison Mcintee on Jul 06, 2024
Verified
If income from operations for a division is $6,000, invested assets are $25,000, and sales are $30,000, the investment turnover is 1.2.
Investment Turnover
A measure of the trading activity in an investment portfolio, calculated by dividing the total sales or purchases (whichever is less) of securities by the average value of the portfolio's assets.
Income From Operations
The profit generated from a business's core activities, excluding revenues and expenses from non-operational activities.
Invested Assets
Invested assets refer to the total of all investments held by an individual or institution, including stocks, bonds, real estate, and other financial assets.
- Spot the ingredients of ROI, which encompass profit margin and investment turnover, and recognize their relevance.
Verified Answer
KC
Karen CorralJul 09, 2024
Final Answer :
True
Explanation :
Investment turnover is calculated by dividing sales by invested assets. In this case, 30,000 divided by 25,000 equals 1.2.
Learning Objectives
- Spot the ingredients of ROI, which encompass profit margin and investment turnover, and recognize their relevance.