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arushi_13
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Posted: 30 Jan 2009 at 01:22 \| IP Logged

For ROI formula = Profit margin * Investment turnover

Here the Profit margin = NI / Sales . Is the NI before taxes or after taxes?

Thanks a lot.

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Posted: 30 Jan 2009 at 14:34 \| IP Logged

usually in these type of problems, the question just gives the net income figure and does not give you the tax rate, so you can just take the net income amount "as-is". Thats my understanding.

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arushi_13
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Posted: 30 Jan 2009 at 19:52 \| IP Logged

So if tax rate is given and NIBT is given then should we calculate NIAT ( NI After tax) and use it in the numerator?

Please advice.

Appreciate your help:)

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Payal123
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Posted: 30 Jan 2009 at 20:25 \| IP Logged

hi Arushi,

as fas as i know it is net income after tax.

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ms500
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Posted: 30 Jan 2009 at 21:57 \| IP Logged

Hi Arushi

I agree with Payal123

Net Income is 100% after tax

ROI = Net Income after tax/Total Assets

Thanks

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