
Concept Introduction
Investment Center: It is a subunit of an organisation that holds responsibility towards its profitability in relation to its investment base (or assets base).
Profit Margin Ratio: Profit Margin Ratio is a financial profitability ratio that is used to compare a company’s net earnings and its net sales. It is calculated by dividing net income (or operating income) by net sales of a company.
Asset Turnover Ratio: Asset Turnover Ratio is a financial efficiency ratio which is used to measure how efficiently a company is using its assets to generate sales. It is measured as the ratio of net sales to the average total assets of a company.
To Compute: Each given division’s profit margin ratio. Also, results are to be interpreted.

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Chapter 24 Solutions
ACCOUNTING PRINCIPLES 222 5/16 >C<
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