Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Conde taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Fee revenue Electronic Mutual Fund Brokerage Division Division $1,090,000 $1,130,000 Operating expenses Invested assets The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department a E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 586,000 4,000,000 3,300,000 Operating expenses Operating income Division Line Item Description Division Division Fee revenue 476,600 Mutual Fund Division Electronic Brokerage Division Feedback Check My Work 1. For each division, subtract operating expenses from fee revenue. Investment Banking Division $1,080,000 Mutual Electronic Investment Fund Brokerage Banking Division 2. Using the DuPont formula for return on investment, compute profit margin, division. Round your answers to one decimal place. Profit Margin 816,000 % 2,200,000 % Investment Turnover ROI 0-0 estment turnover, and return on estm
Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Conde taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Fee revenue Electronic Mutual Fund Brokerage Division Division $1,090,000 $1,130,000 Operating expenses Invested assets The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department a E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 586,000 4,000,000 3,300,000 Operating expenses Operating income Division Line Item Description Division Division Fee revenue 476,600 Mutual Fund Division Electronic Brokerage Division Feedback Check My Work 1. For each division, subtract operating expenses from fee revenue. Investment Banking Division $1,080,000 Mutual Electronic Investment Fund Brokerage Banking Division 2. Using the DuPont formula for return on investment, compute profit margin, division. Round your answers to one decimal place. Profit Margin 816,000 % 2,200,000 % Investment Turnover ROI 0-0 estment turnover, and return on estm
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Divisional income statements and return on investment analysis
E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data
taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:
Fee revenue
Operating
expenses
Invested
assets
Required:
Electronic
Investment
Mutual Fund Brokerage
Banking
Division
Division
Division
$1,090,000 $1,130,000 $1,080,000
586,000
4,000,000 3,300,000
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.
Line Item Description
Fee revenue
Operating expenses
Operating income
Division
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.
E.F. Lynch Company
Divisional Income Statements
For the Year Ended June 30, 20Y8
476,600
Mutual Fund Division
Electronic Brokerage
Division
Feedback
Check My Work
1. For each division, subtract operating expenses from fee revenue.
Investment Banking
Division
2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each
division. Round your answers to one decimal place.
816,000
Mutual Electronic Investment
Fund Brokerage Banking
Division Division Division
2,200,000
Profit
Margin
%
%
%
$
Investment
Turnover
ROI
0*0*0*
%
%
%
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