NorthSouthEastWest Sales$100,000$25,000$75,000$76,000 CGS$50,000$5,000$50,674$45,000 other expenses$25,000$3,000$12,894$15,000 Average total assets$5,000,000$50,000$300,500$567,850 Using the information, calculate the operating profit percentage for each of the divisions. Comment on how your analysis has changed compared to your analysis of the dollar amounts for each division. Using total assets as the investment, calculate the ROI for each division. Comment on the results. Assume a cost of capital of 10%. Calculate the RI for each of the divisions. Comment on the results.

Solution: Operating profit is also known as recurring profit or earning before interest and tax. It…

Answered: North South East West Sales…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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	North	South	East	West
Sales	$100,000	$25,000	$75,000	$76,000
CGS	$50,000	$5,000	$50,674	$45,000
other expenses	$25,000	$3,000	$12,894	$15,000
Average total assets	$5,000,000	$50,000	$300,500	$567,850

Using the information, calculate the operating profit percentage for each of the divisions. Comment on how your analysis has changed compared to your analysis of the dollar amounts for each division.
Using total assets as the investment, calculate the ROI for each division. Comment on the results.
Assume a cost of capital of 10%. Calculate the RI for each of the divisions. Comment on the results.

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