The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department charges): Sales $210,000,000 Cost of goods sold 117,200,000 Gross profit $92,800,000 Administrative expenses 67,400,000 Operating income $25,400,000 The manager of the Consumer Products Division is considering ways to increase the return on investment. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $125,550,000 of assets have been invested in the Consumer Products Division. Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places. Profit margin % Investment turnover Rate of return on investment % If expenses could be reduced by $3,830,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places. Profit margin % Investment turnover Rate of return on investment %

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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The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department charges):

Sales	$210,000,000
Cost of goods sold	117,200,000
Gross profit	$92,800,000
Administrative expenses	67,400,000
Operating income	$25,400,000

The manager of the Consumer Products Division is considering ways to increase the return on investment.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $125,550,000 of assets have been invested in the Consumer Products Division. Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places.

Profit margin %

Investment turnover

Rate of return on investment %
If expenses could be reduced by $3,830,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places.

Profit margin %

Investment turnover

Rate of return on investment %

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