Jef Doyle is evaluating results for three separate business segments under his control. Selected financial
information for each segment follows:
Sales |
Operating Income |
Average Assets |
|
Segment A |
$2,200,000 |
$150,000 |
$2,800,000 |
Segment B |
3,700,000 |
480,000 |
6,200,000 |
Segment C |
1,700,000 |
180,000 |
2,200,000 |
Calculate "margin," "turnover," and "return on investment" for the three segments.
A. |
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B. |
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C. |
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D. |
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E. |
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F. |
None of the above |
Calculation of Margin, Turnover and Return on Investment | ||||||
Margin= | Operating Profit/Sales | |||||
Segment A | 150000/2200000 | |||||
0.068 | ||||||
Segment B | 480000/3700000 | |||||
0.130 | ||||||
SegmentC | 180000/1700000 | |||||
0.106 | ||||||
Turnover= | Sales/Average Asset | |||||
Segment A | 2200000/2800000 | |||||
0.786 | ||||||
SegmentB | 3700000/6200000 | |||||
0.597 | ||||||
SegmentB | 1700000/2200000 | |||||
0.773 | ||||||
Return on Investment= | Operating Profit/Average Assets | |||||
Segment A | 150000/2800000 | |||||
0.054 | ||||||
SegmentB | 480000/6200000 | |||||
0.077 | ||||||
Segment C | 180000/2200000 | |||||
0.082 | ||||||
Answer is (C) |
Jef Doyle is evaluating results for three separate business segments under his control. Selected financial information...