Question

Hammer Time Asia has three divisions China, Thailand, and Japan The following are the income statement information for each division China Thailand Revenue 23,000,000 2,700,000 Operating exp 13,800,000 1,460,000 Service Dep. charges 7,300,000 510,000 Income from Operations 1,900,000 730,000 Invested Assets 17,000,000 3,000,000 The lucky #8. Both China and Japan have minimum acceptable rate of 8%. However, Thailand's minimum acceptable rate is double (16%). Japan 6,200,000 3,630,000 1,570,000 1,000,000 9,000,000

Calculate: ROI, Profit Margin, and Investment turnover for each division in the above question

Answer 1

Solution:

ROI	China	Thailand	Japan
Income From Operations	$19,00,000	$7,30,000	$10,00,000
/Invested Assets	$1,70,00,000	$30,00,000	$90,00,000
ROI	11.18%	24.33%	11.11%
Profit Margin	China	Thailand	Japan
Income From Operations	$19,00,000	$7,30,000	$10,00,000
/Revenue	23000000	2700000	6200000
Profit Margin	8.26%	27.04%	16.13%
Investment Turnover	China	Thailand	Japan
Revenue	23000000	2700000	6200000
/Invested Assets	$1,70,00,000	$30,00,000	$90,00,000
Investment Turover	1.35	0.90	0.69