Question

Required information Exercise 11-11 Effects of Changes in Profits and Assets on Return on Investment (ROI) (LO11-1) [The following information applies to the questions displayed below.) Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year: Sales Net operating income Average operating assets $ 860,000 $ 26,660 $ 100,000 The following questions are to be considered independently. Exercise 11-11 Part 1 Required: 1. Compute the Springfield club's return on investment (ROI) (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI)

Answer 1

Answer : ROI = 26.66 %

>> Return on Investment = ( Net Operating Income * 100 ) / Average operating Asset.

>> Return on Investment = ( $ 26660 * 100 ) / $ 100000 = 26.66 %