Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
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.
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*Read, R. B. 1954. Return on investment - Guide to decisions. N.A.C.A. Bulletin (June): 1231-1244. (3D version of this graphic).
Related chapter summaries:
Clinton, B. D. and S. Chen. 1998. Do new performance measures measure up? Management Accounting (October): 38, 40-43. (Summary).
Martin, J. R. Not dated. The Du Pont ROI Graphic. Management And Accounting Web. DuPontROIGraphic
Martin, J. R. Not dated. Chapter 14: Investment Centers, Return on Investment, Residual Income and Transfer Pricing. Management Accounting: Concepts, Techniques & Controversial Issues. Management And Accounting Web. Chapter14
