b. Determine the investment turnover for each segment. Round to two decimal places.InvestmentTurnoverCompany-OperatedNorth America Franchisedc. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place.Return onInvestmentCompany-Operated%North America Franchised%d. Analyze and interpret the results of (a), (b), and (c).1. The company-operated restaurants have the highest profit margin, investment turnover, and return on investmentbecause Papa John's International incurs no cost of goods sold or operating expense in generating this revenue.2. The North America franchised restaurants have the highest profit margin, investment turnover, and return on investmentbecause Papa John's International incurs no cost of goods sold or operating expense in generating this revenue.3. Both the company-operated and the North America franchised restaurants have relatively the same profit margin,investment turnover, and return on investment because their operating expenses are very similar.4. The company-operating restaurants have low profit margins and return on investment but have the highest investmentturnover since these restaurants incur most of the cost of the investment in property and equipment.4PreviousAWNHNext Analyze Papa John's International, Inc.Papa John's International, Inc. (PZZA), operates over 5,000 restaurants in the United States and 45 countries. Thecompany operates primarily as a franchisor with 4,353 franchised restaurants and 744 company-operated restaurants. Recentdata (in millions) for the company-operated and North America franchised restaurants are as follows:RestaurantsCompany-North AmericaOperatedFranchisedSales$816$103Operating income7592Invested assets22510a. Determine the profit margin for each segment. Round to one decimal place.Profit marginCompany-Operated%North America Franchised%b. Determine the investment turnover for each segment. Round to two decimal places.InvestmentTurnoverCompany-OperatedNorth America Franchised

Solution:- a)Determine the profit margin for each segment as follows under- Profit margin =Operating…

a. Determine the profit margin for each segment. Round to one decimal place. Profit margin Company-Operated % % North America Franchised b. Determine the investment turnover for each segment. Round to two decimal places. Investment Turnover Company-Operated

a. Determine the profit margin for each segment. Round to one decimal place. Profit margin Company-Operated % % North America Franchised b. Determine the investment turnover for each segment. Round to two decimal places. Investment Turnover Company-Operated

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter24: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 3MAD: Papa Johns International, Inc. (PZZA), operates over 5,000 restaurants in the United States and 45...

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Panera Bread Company (PNRA) operates over 2,000 bakery-cafe locations throughout the United States and Canada and serves over 9 million customers per week. Paneras operations are divided into the following segments: Company-Operated Bakery-Cafes Franchised Bakery-Cafes Fresh Dough and Other Products The Fresh Dough and Other Products segment supplies fresh dough, produce, tuna, and other products to the company-operated and franchised cafes. Recent data (in millions) for each of these segments are as follows: a. Determine the profit margin for each segment. Round to one decimal place. b. Determine the investment turnover for each segment. Round to two decimal places. c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place. d. Which segment has the highest profit margin, investment turnover, and return on investment? Explain why. e. If franchised cafes are more profitable, why would Panera operate company- owned cafes?
Papa Johns International, Inc. (PZZA), operates over 5,000 restaurants in the United States and 45 countries. The company operates primarily as a franchisor with 4,353 franchised restaurants and 744 company-operated restaurants. Recent data (in millions) for the company-operated and North America franchised restaurants are as follows: a. Determine the profit margin for each segment. Round to one decimal place. b. Determine the investment turnover for each segment. Round to two decimal places. c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place. d. Analyze and interpret the results of (a), (b), and (c).
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McDonald’s conducts operations worldwide and is managed in three primary geographic segments: U.S., International Lead Markets (including Australia, Canada, France, Germany, and the UK), and High Growth Markets (including China, Italy, Korea, Poland, Russia, Spain, Switzerland, and the Netherlands). A hybrid geographic/corporate segment, Foundational Markets & Corporate, reports on the results of all other countries as well as any unallocated amounts. McDonald’s allocates resources to, and evaluates the performance of, its segments based on operating income. The asset totals disclosed by geography are directly managed by those regions and include accounts receivable, inventory, certain fixed assets, and certain other assets. Corporate assets primarily include cash and cash equivalents, investments, deferred tax assets, and other assets. Refer to the following geographic segment data (in millions) from the 2017 annual report of McDonald’s Corp.:
Hyundai Motor Company is a large multinational automotive manufacturer based in Seoul, South Korea, that also owns a 32.8 percent of Kia Motors. Currently the fourth largest vehicle manu- facturer in the world, Hyundai operates the world's largest integrated automobile manufacturing facility in Ulsan, South Korea. With around 75,000 employees globally, Hyundai sells automobiles across 193 countries with the help of around 6.000 dealerships and showrooms. In August 2015, the five largest auto brands in China are Volkswagen, General Motors, Nissan Motor, Hyundai Motor, and Toyota Motor. Among these five companies, only Toyota is on track to meet its full-year 2015 target, while Hyundai is performing the worst. Specifically, in the first-half of 2015, Toyota's China sales rose 10 percent, on track to meet their 20 percent full-year's growth tar- get. In contrast, Hyundai's China sales fell 8 percent although the company has a 3 percent full-year growth target. Hyundai recently posted its…
Leapin’ Larry’s Pre-Owned Cars has two divisions, Operations and Financing. Operations is responsible for selling Larry’s inventory as quickly as possible and purchasing cars for future sale. Financing Division takes loan applications and packages loans into pools and sells them in the financial markets. It also services the loans. Both divisions meet the requirements for segment disclosures under accounting rules. Operations Division had $74 million in sales last year. Costs, other than those charged by Financing Division, totaled $32 million. Financing Division earned revenues of $23 million from servicing loans and incurred outside costs of $24 million. In addition, Financing charged Operations $22 million for loan-related fees. Operations’s manager complained to Larry that Financing was charging twice the commercial rate for loan-related fees and that Operations would be better off sending its buyers to an outside lender. Financing's manager replied that although commercial…
Leapin’ Larry’s Pre-Owned Cars has two divisions, Operations and Financing. Operations is responsible for selling Larry’s inventory as quickly as possible and purchasing cars for future sale. Financing Division takes loan applications and packages loans into pools and sells them in the financial markets. It also services the loans. Both divisions meet the requirements for segment disclosures under accounting rules. Operations Division had $32 million in sales last year. Costs, other than those charged by Financing Division, totaled $18 million. Financing Division earned revenues of $9 million from servicing loans and incurred outside costs of $10 million. In addition, Financing charged Operations $8 million for loan-related fees. Operations’s manager complained to Larry that Financing was charging twice the commercial rate for loan-related fees and that Operations would be better off sending its buyers to an outside lender. Financing's manager replied that although commercial rates…
Sherwin Williams is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint Stores (branded retail location), Consumer (paint and through stores such as Sears, Home Depot, etc.), Automotive (sales to auto manufacturers), International, and Administration. The following is selected hypothetical divisional information for the company's two largest divisions: Paint Stores and Consumer (in thousand of dollars). Sales Operating Income Total Assets Paint Stores $3,900,000 $507,000 $1,500,000 Consumer $1,250,000 $175,000 $1,562,000 Assume that management has specified a 20% target rate of return. Calculate each division's capital turnover.
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