Question

Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division. Furniture Division: Year 1 Year 2 Sales $32,670,000 $35,000,000 Operating income 1,339,470 1,435,000 Average operating assets 10,000,000 10,000,000 Houseware Division: Year 1 Year 2 Sales $12,260,000 $12,691,000 Operating income 576,220 469,567 Average operating assets 5,000,000 5,000,000 Required: Round the ROI and margin percentages to two decimal places (for example, enter the decimal .10555 as "10.56" percent). Round the turnover ratio to two decimal places.

1. Compute the ROI and the margin and turnover ratios for each year for the Furniture Division. Furniture Division ROI Margin Turnover

Year 1 ____% ____ %

Year 2 ____ % ____%

2. Compute the ROI and the margin and turnover ratios for each year for the Houseware Division. Houseware Division ROI Margin Turnover

Year 1 ____ % ____%

Year 2 ____ % ____%

Answer 1

1. Compute the ROI and the margin and turnover ratios for each year for the Furniture Division. Furniture Division ROI Margin Turnover

	Division ROI	Margin	Turnover
Year 1	4.1%*3.27 = 13.41%	1339470*100/32670000 = 4.1%	32670000/10000000 = 3.27
Year 2	4.1%*3.5 = 14.35%	1435000*100/35000000 = 4.1%	35000000/10000000 = 3.5

2. Compute the ROI and the margin and turnover ratios for each year for the Houseware Division. Houseware Division ROI Margin Turnover

	ROI	Margin	Turnover
Year 1	4.7*2.45 = 11.52%	576220/12260000 = 4.7%	12260000/5000000 = 2.45
Year 2	3.7*2.54 = 9.40%	469567*100/12691000 = 3.7%	12691000/5000000 = 2.54