Question

Around Square, Inc. had an ROI of 12.5%, turnover of 5.0, and sales of $8 million for the year. Around Square's margin for the year was:

A. 2.5%
B. 4.0%
C. $1,000,000
D. $1,600,000

Answer 1

The margin for Around Square, Inc. was 2.5%, calculated by dividing the ROI of 12.5% by the turnover of 5.0.

Step-by-step explanation:

The student asked about calculating the margin for Around Square, Inc., given an ROI of 12.5%, a turnover of 5.0, and sales of $8 million. The Return on Investment (ROI) formula is ROI = Margin × Turnover. To find the margin, we rearrange the formula as Margin = ROI / Turnover. Inserting the given values results in a margin of Margin = 0.125 / 5.0, which equals 0.025 or 2.5%. Therefore, the margin for the year was 2.5%.