Question

ROI, Margin, Turnover Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division Furniture Division: Year 1 Year 2 Sales Operating income $33,350,000 1,434,050 10,000,000 $35,710,000 1,535,530 10,000,000 Average operating assets Houseware Division: Sales 370,000 $11,778 Operating income 579.870 482.902 Average operating assets 5,000,000 5,000,000 Required: Round the ROI and margin percentages to two decimal places (for example, enter the decimal 10555 as "10.56" percent). Round the turnover ratio to two decimal places 1. Compute the ROI and the margin and turnover ratios for each year for the Furniture Division Furniture Division

Answer 1

1.

ROI, year 1 = Operating income/Average operating assets

= 1,434,050/10,000,000

= 14.34%

ROI, year 2 = Operating income/Average operating assets

= 1,535,530/10,000,000

= 15.36%

Margin, year 1 = Operating income/sales

= 1,434,050/33,350,000

= 4.3%

Margin, year 2 = Operating income/sales

= 1,535,530/35,710,000

= 4.3%

Turnover ratio, year 1 = Sales/Average operating assets

= 33,350,000/10,000,000

= 3.34

Turnover ratio, year 2 = Sales/Average operating assets

= 35,710,000/10,000,000

= 3.57

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