Advanced Electronics has two separate, but related, divisions: digital video and

Question

Advanced Electronics has two separate, but related, divisions: digital video and analog video. The digital video division has sales of $800,000, net operating income of $80,000, and average operating assets of $1 million. Required: If required, round your margin answer to a whole percent and the turnover answer to one decimal place. Do not round your intermediate calculations.

a. What is the digital division's margin and turnover?

Margin: _____%

Turnover: _____times

b. What is the ROI for the digital division? _____%

Explanation / Answer

a. Margin ratio=( Net Operating Income / Sales)=(80000/800000)=10%

.Total Assets Turnover ratio = Sales/Average operating assets=(800000/1000000)=0.8 times

b. ROI= Net Operating Income/ Average operating assets=(80000/1000000)=8%

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