Comparative data on three companies in the same service industry are given below:CompanyA B CSales ....................................................... $600,000 $500,000 $ ?Net operating income .............................. $ 84,000 $ 70,000 $ ?Average operating assets ........................ $300,000 $ ? $1,000,000Margin ...................................................... ? ? 3.5%Turnover .................................................. ? ? 2ROI .......................................................... ? 7% ?Required:1. What advantages are there to breaking down the ROI computation into two separate elements, marginand turnover?2. Fill in the missing information above, and comment on the relative performance of the three companiesin as much detail as the data permit. Make specific recommendations about how to improve the ROI.
Comparative data on three companies in the same service industry are given below:
Company
A 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
Required:
1. What advantages are there to breaking down the ROI computation into two separate elements, margin
and turnover?
2. Fill in the missing information above, and comment on the relative performance of the three companies
in as much detail as the data permit. Make specific recommendations about how to improve the ROI.
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