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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) the target rate of return is 10%

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) the target rate of return is 10%

FINANCIAL ACCOUNTING
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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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:

  1. Calculate each Division’s ROI rounding all of your answers to three decimal places.
  2. Calculate each Division’s profit margin ratio. What do your results mean?
  3. Calculate each Division’s asset turnover ratio.
  4. Calculate each Division’s residual income (RI) the target rate of return is 10%
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