Comprehensive Final Exam: Part 1 (Problems) Help Save & Exi Submit Saved Gabbe I

Question

Comprehensive Final Exam: Part 1 (Problems) Help Save & Exi Submit Saved Gabbe Industries is a division of a major corporation. Last year the division had total sales of $33,667,200, net operating income of $4,679,741, and average operating assets of $7,014,000. The company's minimum required rate of return is 22%. Required: a. What is the division's margin? (Round your percentage answer to 2 decimal places.) b. What is the division's turnover? (Round your answer to 2 decimal places.) c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 decimal places.) a. Margin b. Turnover c. Return on investment

Explanation / Answer

Margin = Net income*100/Sales = 4679741*100/33667200 = 13.90%

Turnover = Sales/average operating assets = 33667200/7014000 = 4.80

Return on investment = 4679741*100/7014000 = 66.72%

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