1 of 1 GE1715 SAMPLE PROBLEMS ON FINANCIAL RATIOS 1. The management of International Heal Medical Company is evaluating the performance of its three (3) divisions. The Booboo Division had operating profit of P24,950 and on average used assets with a book value of P311,900. The Splint Division had an operating profit of P17,500 and used average assets of P177,950. The Intensive Care Division had an operating profit of P28,500 and average assets of P475,000. The company is planning to award the Intensive Care Division relying on its high operating profit. Should the management continue with this decision? Justify your answer.

1 of 1 GE1715 SAMPLE PROBLEMS ON FINANCIAL RATIOS 1. The management of International Heal Medical Company is evaluating the performance of its three (3) divisions. The Booboo Division had operating profit of P24,950 and on average used assets with a book value of P311,900. The Splint Division had an operating profit of P17,500 and used average assets of P177,950. The Intensive Care Division had an operating profit of P28,500 and average assets of P475,000. The company is planning to award the Intensive Care Division relying on its high operating profit. Should the management continue with this decision? Justify your answer.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 14.16E

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