Question

Comparative data on three companies in the same service industry are given below. Required: 2. Fill...

Comparative data on three companies in the same service industry are given below.


Required:

2. Fill in the missing information. (Do not round intermediate calculations. Round the "Turnover" and "ROI" answers to 2 decimal places.)

Companies in the Same Industry
A B C
Sales $4,020,000 $1,620,000
Net operating income $562,800 $194,400
Average operating assets $2,010,000 $2,900,000
Margin % % 4 %
Turnover times times 1.50 times
Return on investment (ROI) % 7.20 % %

Homework Answers

Answer #1

Margin=Net operating income/Sales

Turnover=Sales/Average operating assets

ROI=Net operating income/Average operating assets

A B C
Sales 4,020,000 1,620,000 (2,900,000*1.5)=$4,350,000
Net operating income 562,800 194400 (4,350,000*4%)=$174,000
Average operating assets 2,010,000 (194400/0.072)=$2,700,000 2,900,000
Margin

(562800/4,020,000)

=14%

(194400/1,620,000)

=12%

4%
Turnover (4,020,000/2,010,000)=2 (1,620,000/2,700,000)=0.6 1.5
ROI

(562800/2,010,000)

=28%

7.2%

(174,000/2,900,000)

=6%

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