Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).   Investment Center Sales   Income   Average Invested Assets Electronics $ 39,840,000   $ 2,988,000   $ 16,600,000   Sporting goods   25,200,000     2,142,000     12,600,000       Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).
 

Investment Center Sales   Income   Average
Invested Assets
Electronics $ 39,840,000   $ 2,988,000   $ 16,600,000  
Sporting goods   25,200,000     2,142,000     12,600,000  
 

 

Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?

Profit Margin
Investment
Turnover
Compute profit margin for each department. Which department generates the most net income per dollar of sales?
Profit Margin
Choose Numerator:
I Choose Denominator:
Profit Margin
Investment Center
Profit Margin
Electronics
=
Sporting Goods
%3D
Which department generates the most net income per dollar of sales?
< Profit Margin
Investment Turnover >
Investment
Profit Margin
Turnover
Compute investment turnover for each department. Which department is most efficient at generating sales from average
invested assets?
Investment Turnover
Choose Numerator:
I Choose Denominator:
= Investment Turnover
Investment Center
Electronics
Sporting Goods
Which department is most efficient at generating sales from average invested
Investment Turnover
assets?
< Profit Margin
Investment Turnover
Transcribed Image Text:Profit Margin Investment Turnover Compute profit margin for each department. Which department generates the most net income per dollar of sales? Profit Margin Choose Numerator: I Choose Denominator: Profit Margin Investment Center Profit Margin Electronics = Sporting Goods %3D Which department generates the most net income per dollar of sales? < Profit Margin Investment Turnover > Investment Profit Margin Turnover Compute investment turnover for each department. Which department is most efficient at generating sales from average invested assets? Investment Turnover Choose Numerator: I Choose Denominator: = Investment Turnover Investment Center Electronics Sporting Goods Which department is most efficient at generating sales from average invested Investment Turnover assets? < Profit Margin Investment Turnover
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