Margin, Turnover, Return on Investment, Average OperatingAssetsElway Company provided the following income statement for the last year:Sales $1,040,000,000Less: Variable expenses 700,250,000Contribution margin $ 339,750,000Less: Fixed expenses 183,750,000Operating income $ 156,000,000At the beginning of last year, Elway had $28,300,000 in operating assets. At the end of the year,Elway had $23,700,000 in operating assets.Required:1. Compute average operating assets.2. Compute the margin and turnover ratios for last year. (Note: Round the answer formargin ratio to two decimal places.)3. Compute ROI. (Note: Round answer to two decimal places.)4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI.5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company isrelatively high (as compared to the lower ROI of a typical manufacturing company).
Margin, Turnover,
Assets
Elway Company provided the following income statement for the last year:
Sales $1,040,000,000
Less: Variable expenses 700,250,000
Contribution margin $ 339,750,000
Less: Fixed expenses 183,750,000
Operating income $ 156,000,000
At the beginning of last year, Elway had $28,300,000 in operating assets. At the end of the year,
Elway had $23,700,000 in operating assets.
Required:
1. Compute average operating assets.
2. Compute the margin and turnover ratios for last year. (Note: Round the answer for
margin ratio to two decimal places.)
3. Compute ROI. (Note: Round answer to two decimal places.)
4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI.
5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is
relatively high (as compared to the lower ROI of a typical manufacturing company).
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