What will happen to return on investment (roi) if selling and administrative expenses decrease while everything else remains the same?

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08-08-2017
Business

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What will happen to return on investment (roi) if selling and administrative expenses decrease while everything else remains the same?

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Louli Louli · Answer 1 · 2017-08-15T01:17:21+02:00

Louli Louli

15-08-2017

ROI = Operating income / Total Assets

It is obvious that ROI is inversely proportional to the total assets at constant income.

Therefore, if selling and administrative expenses decrease while everything else remains the same, the ROI will increase.

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