
Introduction:
Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.
Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.
To Calculate:
Requirement 1: Return on Investment of both divisions

Answer to Problem 12E
Solution:
Beverage Division = 13.28%
Cheese Division = 14.32%
Explanation of Solution
Beverage Division
Cheese Division
Requirement 2: Profit Margin of both divisions

Answer to Problem 12E
Solution:
Beverage Division = 13.02%
Cheese Division = 16.15%
Explanation of Solution
Beverage Division
Cheese Division
Requirement 3: Investment Turnover of both divisions

Answer to Problem 12E
Solution:
Beverage Division = 1.02
Cheese Division = 0.89
Explanation of Solution
Beverage Division
Cheese Division
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Chapter 24 Solutions
Fundamental Accounting Principles
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