Elite Equipment Co. is a division of a major corporation. The following data are for the most recent year of operations: Sales Financial Data Net Operating Income Average Operating Assets Amount ($) $14,800,000 $400,000 $4,200,000 Company's Minimum Required Rate of Return 12% Requirement: Determine the division's turnover ratio used to compute the Return on Investment (ROI).

Elite Equipment Co. is a division of a major corporation. The following data are for the most recent year of operations: Sales Financial Data Net Operating Income Average Operating Assets Amount ($) $14,800,000 $400,000 $4,200,000 Company's Minimum Required Rate of Return 12% Requirement: Determine the division's turnover ratio used to compute the Return on Investment (ROI).

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

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Forchen, Inc., provided the following information for two of its divisions for last year: Required: 1. For the Small Appliances Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating assets b. Margin c. Turnover d. Return on investment (ROI) 3. What if operating income for the Small Appliances Division was 2,000,000? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios (round to four significant digits).
During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000,000. A. Based on this information, calculate asset turnover. B. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?
The following selected data pertain to the Argent Division for last year: Required: 1. How much is the residual income? 2. How much is the return on investment? (Rounded to four significant digits.)
Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested assets of 180,000, and sales of 720,000. Use the DuPont formula to compute the return on investment and show (A) the profit margin, (B) the investment turnover, and (C) the return on investment.
The following revenue data were taken from the December 31, 2017, General Electric annual report (10-K): For each segment and each year, calculate intersegment sales (another name for transfer sales) as a percentage of total sales. Using Microsoft Excel or another spreadsheet application, create a clustered column graph to show the 2016 and 2017 percentages for each division. Comment on your observations of this data. How might a division sales manager use this data?
Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.
The operating income and the amount of invested assets in each division of Conley Industries are as follows: a. Compute the return on investment for each division. b. Which division is the most profitable per dollar invested? Based on the data in Exercise 10 assume that management has established a 15% minimum acceptable return for invested assets. a. Determine the residual income for each division. b. Which division has the most residual income?
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Calculator Data for Divisions A, B, C, D, and E are as follows: a. Determine the missing items. Round rate of return on investment, profit margin, and investment turnover answers to one decimal place when required. Div. Sales Income from Operations Inv. Assets Rate of Return on Inv. Profit Margin Invest. Turnover A $ $35,000 $200,000 % % 1.6 B $455,000 $ $284,375 16% % C $525,000 $73,500 $ % % 1.2 D $800,000 $ $ % 13.0% 2.5 E $ $ $250,000 % 16.0% 2.0 b. Which division is most profitable in terms of income from operations? c. Which division is most profitable in terms of rate of return on investment?
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales revenue $ 1,209,000 $ 1,810,000 Cost of goods sold and operating expenses 900,000 1,286,000 Net operating income $ 309,000 $ 524,000 Average invested assets $ 1,200,000 $ 1,460,000 The company’s hurdle rate is 6.26 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) river steam ROI % % Residual income (loss) 2. Recalculate ROI and residual income for the division for each independent situation that follows: Operating income increases by 11 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss…
Roi general accounting