Read Diagram

MAAW's Chapter 14 | Return on Investment Main Page

 CTR = Capital Turnover Ratio = (Sales ÷ Investment)

 ROS = Return on Sales = Net Income ÷ Sales

 ROI = Return on Investment  = (CTR)(ROS)

 Examples: 

 When the CTR is 2.5 and the ROS is 4, the ROI is 10.
 When the CTR is 2.5 and the ROS is 8, the ROI is 20.