The Return on Inventory Investment Formula Is

question 46

Multiple Choice

The return on inventory investment formula is:

• A) (Revenue - Gross margin) × (Gross margin - Inventory)
• B) (Revenue - Cost of goods sold) × (Revenue ¸ Inventory)
• C) (Gross margin ¸ Revenue) × (Revenue ¸ Inventory)
• D) None of these are correct

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Definitions:

Investments

Assets purchased with the expectation that they will generate income or appreciate in the future.

Owner's Equity

Refers to the residual interest in the assets of a company after deducting liabilities, representing the ownership interest.

Property Plant and Equipment

Durable physical assets that are utilized in running a business and are not meant to be sold.

Intangible Assets

Non-physical assets that have value due to the rights or information they provide, such as trademarks, patents, and goodwill.