Water Paints Inc. has two major Divisions and has collected the following information about them. Net Sales revenue Operating income Average Total Assets Stores $3,989,000 $480,000 $1,250,000 Consumer 1,425,000 185,000 1,500,000 Required: Calculate each Division’s ROI rounding all of your answers to three decimal places. Calculate each Division’s profit margin ratio. What do your results mean? Calculate each Division’s asset turnover ratio.
Water Paints Inc. has two major Divisions and has collected the following information about them. Net Sales revenue Operating income Average Total Assets Stores $3,989,000 $480,000 $1,250,000 Consumer 1,425,000 185,000 1,500,000 Required: Calculate each Division’s ROI rounding all of your answers to three decimal places. Calculate each Division’s profit margin ratio. What do your results mean? Calculate each Division’s asset turnover ratio.
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 8PB: The following revenue data were taken from the December 31, 2017, General Electric annual report...
Related questions
Question
Problem 2
Water Paints Inc. has two major Divisions and has collected the following information about them.
|
Net Sales revenue |
Operating income |
Average Total Assets
|
Stores |
$3,989,000 |
$480,000 |
$1,250,000 |
Consumer |
1,425,000 |
185,000 |
1,500,000 |
Required:
- Calculate each Division’s
ROI rounding all of your answers to three decimal places. - Calculate each Division’s profit margin ratio. What do your results mean?
- Calculate each Division’s asset turnover ratio.
- Calculate each Division’s residual income (RI)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning