Concept introduction:
Return on investment is a ratio calculated to determine how much return our invested assets are generating. A high return on Investment shows that investments are generating higher returns.
Return on Investment of ZNet Co.
Concept introduction:
Profit Margin:
Profit margin is a factor of determining profitability of a company. The higher the profit margin, the higher is the growth of the company. It is calculated by dividing net profit or net income to the sales of the company.
Profit Margin of ZNet Co.
Return on investment after 20% increase in sales.
(4)
Concept introduction:
Investment Turnover:
Investment turnover is used to determine capacity of an organisation to generate revenue with a specific amount of invested assets. It is calculated by dividing company’s sales value with company’s average invested assets.
Investment Turnover of ZNet Co.
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
- Case Study Questions What was the total postpaid revenue in 2017? What was the total net profit in 2017? Identify examples of strategies adopted by MAXIS in that year. How were the above strategies related to their Customer Relationship Management (CRM) and future sale?arrow_forwardYou are a financial Manager of Chevron Corp. You need to assess the effectiveness of working capital management of the company for 2018 using the following data. What is the 2018 Inventory turnover? 2017 Account Receivable = 15,353,000 2018 Account Receivable = 15,050,000 2017 Inventory = 5,585,000 2018 Inventory = 5,704,000 2017 Accounts Payable = 14,565,000 2018 Accounts Payable = 13,953,000 2017 Sales = 134,674,000 2018 Sales = 158,902,000 2017 Cost of Sales = 95,114,000 2018 Cost of Sales = 113,997,000 2017 Purchases = 95,114,000 2018 Purchases = 123,435,000arrow_forwardSuppose a firm has had the following historic sales figures. Year: Sales 2016 $1,900,000 2017 $2,150,000 2018 $1,800,000 2019 $2,400,000 2020 $2,000,000 What would be the forecast for next year's sales using the average approach? Next year's salesarrow_forward
- Quyox Sdn Bhd manufactures a special toy called Omma that are sold through a network of sales agents throughout Malaysia. The company sold 67,500 units of Omma in 2022 with equivalent to sales amounting to RM1,350,000. The sales agents are currently paid at 15% commission on sales. The following is the pro forma (projected) statement of profit or loss and other comprehensive income for the year ended 31 December 2022. Qu Yox Sdn Bhd Pro Forma Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2022 Sales Cost of Goods Sold: Variable Fixed Gross Profit Operating expenses: Sales Commision Fixed Advertising Expenses General and Administrative Expenses: Rental expenses Administrative Salaries Expenses Insurance Expenses Net Income 675,000 135,000 202,500 33,750 27,000 67,500 20,250 1,350,000 810,000 540,000 351,000 189,000arrow_forwardSuppose a firm has had the following historic sales figures. What would be the forecast for next year's sales using the average approach? Year: 2009 2010 2011 2012 2013 Sales $1,500,000 $1,750,000 $1,400,000 $2,000,000 $1,600,000arrow_forwardCalculate Snappy’s operating income for 2016.arrow_forward
- 2. In your position as research assistant to a portfolio manager, you need to analyze the profitability of the companies in the portfolio. Using the data for Electronic Arts, Inc. (NASDAQ: EA) below: a. b. C. Fiscal Year Total Revenue Net Income 2016 4,396 1,156 2015 4,515 875 2014 3,575 8 2013 3,797 98 2012 4,143 76 Calculate the net profit margin for each year. Calculate the compound average annual growth rates (CAGR) for revenue and net income using the GEOMEAN function. Is net income growing more slowly or faster than total revenue? Is this a positive for your investment in the company? Calculate the average annual growth rate of total revenue using the AVERAGE function. Is this result more or less accurate than your result in the previous question? Why? d. Create a Column chart of total revenue and net income. Be sure to change the chart so that the x-axis labels contain the year numbers, and format the axis so that 2016 is on the far right side of the axis.arrow_forwardIt is January 1st, 2014 and Oscar D’Souza has decided to start a new business. He wants to forecast the first year’s Income Statement and Balance sheet. He believes the assumptions below are reasonable – and wants you to assist him by creating the forecasted statements. You agree. Please construct an Income Statement and Balance Sheet from the information provided below. First year sales will total $100,000 Gross margins will be 50% Operating margins will be 20% Accounts Receivables will be about 15% of sales Inventory will be 12% of sales Accounts Payable will be 5% of sales Accrued expenses payable will be 7% of sales The Bank of Connecticut will provide a loan of $30,000. The annual interest will be 8%, compounded annually. Interest only payments are needed – until the loan is due in 5 years, where a balloon payment for the full balance must be paid. The combined federal and provincial tax rates will be 30% Capital equipment purchases will be made at the start of the year.…arrow_forwardEvaluate the two departments for Moxie Products. Compare the year’s performance of the two departments in terms of ROI and RI. Which department has created the most wealth for Moxie shareholders in the past year?arrow_forward
- Find online the annual 10-K report for Costco Wholesale Corporation (COST) for fiscal year 2015 (filed in October 2015). a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. b. Verify the DuPont Identity for Costco's ROE. c. If Costco's managers wanted to increase its ROE by 1 percentage point, how much higher would their asset turnover need to be? a. Compute Costco's net profit margin, total asset turnover, and equity multiplier. The net profit margin is %. (Round to two decimal places.) The total asset turnover is (Round to two decimal places.) The equity multiplier is (Round to two decimal places.) b. Verify the DuPont Identity forCostco's ROE. The ROE is %. (Round to two decimal places.) c. If Costco's managers wanted to increase its ROE by 1 percentage point, how much higher would their asset turnover need to be? The total assets turnover should be (Round to two decimal places.) The total asset turnover should be % (Round to two decimal places and…arrow_forwardUse the following information for Short Exercises S15-6 through S15-10. Accel’s Companies, a home improvement store chain, reported the following summarized figures: Requirements Compute the profit margin ratio for Accel’s Companies for 2018. Compute the rate of return on total assets for 2018.arrow_forwardSales SOLVE IT ON MS EXCEL or GOOGLE SPREADSHEET (please send the file) Ziegen, Inc. Income Statement for 2013 Make a Proforma Income Statement and ProForma Balance Sheet using the Financial Planning attached. Use 15% as the Sales Growth Rate of the 2013 base year, all other data remain the same. Net Income Ziegen, Inc. Balance Sheet for 2013 Current assets Net fixed assets Total Total Accounts payable Accrued expenses Notes payable Current liabilities Long-term debt Total liabilities Common stock (par) Paid-in capital Retained earnings Common equity $10,000,000 $ 500,000 $ 2,000,000 4,000,000 $ 6,000,000 $ 1,000,000 1,000,000 500,000 $ 2,500,000 2,000,000 $ 4,500,000 100,000 200,000 1,200,000 $ 1,500,000 $6,000,000 Calculation $.5m/$10m = Calculation $2m/$10m = $4m/$10m = $1m/$10m = $1m/$10m = Ziegen, Inc. Pro Forma Income % of 2013 Sales Statement for 2014 5.0% % of 2013 Sales 20.0% 40.0% 10.0% 10.0% NAª NA NA" NA" Calculation 20% Sales growth rate = Sales Net Income Ziegen, Inc. Pro…arrow_forward