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When we are given opening and closing balances of receivables then we add them and divide by 2 to get average receiveables. BUT if we are given the only closing balance then we should divide it by 2 or not to get the average?
Secondly, do we take the average investment figures in ROI formula?
If only given the closing balance then you use it. Dividing it by 2 would be meaningless.
Unless the question specifies otherwise, then for Paper PM we usually use the opening net assets when calculating the ROI on the basis that it is these assets that will be generating the profit for the year.
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