Question

A firm has four branch offices throughout the state. Following are the operating results from last year. K City G City W City S City Branch office sales $300,000 $420,000 $ 540,000 $606,000 Branch office profit 120,000 294,000 318,000 104,000 Average total assets 805,000 914,000 1,650,000 745,000 Which branch had the highest return on investment?

A. K City.
B. G City.
C. W City.
D. S City.

Answer 1

City K City G City W City S

$ $ $ $

ROI

= NP x 100 120.000 x 100 294,000 x 100 318,000 x 100 104,000 x 100

ATA 805,000 914,000 1,650,000 745,000

ROI 14.91% 32.17% 19.27% 13.96%

Where ROI refers to return on invetment, NP represents net profit and ATA denotes average total assets.

City G has the highest return on investment.

Step-by-step explanation:

Return on investment is calculated as the ratio of net profit to average total assets multiplied by 100.