A food manufacturer reports the following for two of its
divisions for a recent year.
($millions) | Beverage Division | Cheese Division | ||||||||||||||||||||||||||||||||||||
Invested assets, beginning | $ | 2,675 | $ | 4,468 | ||||||||||||||||||||||||||||||||||
Invested assets, ending | 2,599 | 4,406 | ||||||||||||||||||||||||||||||||||||
Sales | 2,687 | 3,931 | ||||||||||||||||||||||||||||||||||||
Operating income | 355 | 640 | ||||||||||||||||||||||||||||||||||||
Compute return on investment. (Enter your answers in millions.)
|
Compute profit margin. (Enter your answers in millions.)
|
Compute investment turnover for the year. (Enter your answers in millions.)
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1.
Return on Investment | |||||
Investment Center | Operating Income | / | Average Invested Assets | = | Return on Investment |
Beverage | 355 | 2,637 | 13.5 % | ||
Cheese | 640 | 4,437 | 14.4 % |
2.
Profit Margin | |||||
Investment Center | Operating Income | / | Sales | = | Profit Margin |
Beverage | 355 | 2,687 | 13.2 % | ||
Cheese | 640 | 3,931 | 16.3 % |
3.
Investment Turnover | |||||
Investment Center | Sales | / | Averge Invested Assets | = | Investment Turnover |
Beverage | 2,687 | 2,637 | 1.02 | ||
Cheese | 3,931 | 4,437 | 0.89 |
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