Comparative data on three companies in the same service industry are given below: A Company B C Sales $600,000 $500,000 $ ? Net operating income $ 84,000 $ 70,000 $ ? Average operating assets $300,000 $ ? $1,000,000 Margin ? ? 3.5% Turnover ? ? 2 ROI ? 7% ? Required: 1. What advantages are there to breaking down ROI into margin and turnover? 2. Fill in the missing information above, and comment on the relative performance of the three companies. Make specific recommendations about how to improve the ROI.
Comparative data on three companies in the same service industry are given below: A Company B C Sales $600,000 $500,000 $ ? Net operating income $ 84,000 $ 70,000 $ ? Average operating assets $300,000 $ ? $1,000,000 Margin ? ? 3.5% Turnover ? ? 2 ROI ? 7% ? Required: 1. What advantages are there to breaking down ROI into margin and turnover? 2. Fill in the missing information above, and comment on the relative performance of the three companies. Make specific recommendations about how to improve the ROI.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
go.3
Transcribed Image Text:Comparative data on three companies in the same service industry are given
below:
A
Company
B
C
Sales
$600,000 $500,000 $
?
Net operating income
$ 84,000 $ 70,000 $
?
Average operating assets $300,000 $
?
$1,000,000
Margin
?
?
3.5%
Turnover
?
?
2
ROI
?
7%
?
Required:
1. What advantages are there to breaking down ROI into margin and turnover?
2. Fill in the missing information above, and comment on the relative performance
of the three companies. Make specific recommendations about how to improve
the ROI.
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education