Having excessive funds tied up in operating assets will depress Blank______ and lower ROI.Multiple choice question.marginboth turnover and marginturnover

The correct answer is "both turnover and margin".

Here's why:

1. Operating assets are the assets required for the day-to-day functioning of a business. When excessive funds are tied up in these assets, it means that a large portion of a company's capital is being used to maintain its operations rather than being invested in profitable ventures.

2. This situation can depress both turnover and margin. Turnover refers to the rate at which a company sells and replaces its inventory. When funds are tied up in operating assets, a company may not be able to invest in inventory as needed, which can lead to lower sales and, consequently, lower turnover.

3. Margin refers to the difference between the sales revenue and the cost of goods sold (COGS), divided by the sales revenue. When a company has excessive funds tied up in operating assets, it may have higher operating costs, which can increase the COGS and decrease the margin.

4. A lower turnover and margin can result in a lower return on investment (ROI), as both these factors contribute to the profitability of a company. ROI is calculated by dividing the net profit by the cost of investment. Therefore, if the turnover and margin are low, the net profit will also be low, leading to a lower ROI.