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The following information regarding Maven, Inc. is available:    Sales $ 1,950,000 Cost of goods sold...

The following information regarding Maven, Inc. is available:

  

Sales $ 1,950,000
Cost of goods sold $ 1,350,000
Operating expenses $ 540,000
Operating income $ 60,000
Average invested capital $ 2,950,000

1. What is the return on investment for Maven, Inc.?

  • 3.08%

  • 20.34%

  • 30.77%

  • 2.03%

2. What is the return on sales for Maven, Inc.?

  • 3.08%

  • 2.03%

  • 20.34%

  • 30.77%

3. What is the capital turnover for Maven, Inc.?

  • 30.77%

  • 3.08%

  • 66.10%

  • 2.03%

Business   Accounting   
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Answer #1

Question - 1.

Answer : D = 2.03 %.

>> Return on Investment = [ Operating Income / Average invested capital ]

>> Return on Investment = [ ( $ 60,000 * 100 ) / $ 2,950,000 ]

>> Return on Investment = 2.03 %

_____________________________________________________________________________

Question - 2.

Answer : A = 3.08 %.

>> Return on Sales = [ Operating Income / Sales ]

>> Return on Sales = [ ( $ 60,000 * 100 ) / $ 1,950,000 ]

>> Return on Sales = 3.08 %.

_______________________________________________________________________________

Question - 3.

Answer : C = 66.10 %.

>> Capital turnover = [ Sales / Average capital invested ]

>> Capital turnover = [ ( $ 1,950,000 * 100 ) / $ 2,950,000 ]

>> Capital turnover = 66.10 %.

_____________________________________________________________________________________

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