Net Sales Revenue Operating Income Average Total Assets Residential $ 550,000 1,090,000 $ 65,280 164,820 $ 192,000 402,000 Professional Manaecment bar

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.13P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
icon
Related questions
Question

Using ROI and RI to evaluate investment centers

Zims, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year:

Management has 21 26% target rate of return for each division.

Requirements

  1. Calculate each division’s ROI. Round all of your answers to four decimal places.
  2. Calculate each division’s profit margin ratio. Interpret your results.
  3. Calculate each division’s asset turnover ratio. Interpret your results.
  4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude.
Net Sales Revenue Operating Income Average Total Assets
Residential
$ 550,000
1,090,000
$ 65,280
164,820
$ 192,000
402,000
Professional
Manaecment bar
Transcribed Image Text:Net Sales Revenue Operating Income Average Total Assets Residential $ 550,000 1,090,000 $ 65,280 164,820 $ 192,000 402,000 Professional Manaecment bar
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 5 images

Blurred answer
Knowledge Booster
Divisional performance management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning