One way to relate operating profits to assets employed is to compute the profit earned per dollar of investment.
For example, the first division earned $0.20 per dollar invested ($100,000/$500,000); the second division earned only $0.10 per dollar invested ($200,000/$2,000,000). In percentage terms, the first division provides a 20 percent rate of return and the second division, 10 percent. This method of computing the relative profitability of investments is known as the return on investment.