Question

Comparative data on three companies in the same service industry are given below: Required: 2. Fill in the missing information. (Round the "Margin" answers to 1 decimal place and "Turnover" answers to 2 decimal places.) Company В C $ $ Sales 600,000 500,000 84,000 70,000 Net operating income $ $ 300,000 1,000,000 Average operating assets 3.5% Margin % % Turnover 2.00 % 7 % Return on investment (ROI) %
(Just need Req 2 for both questions)

Answer 1

Hence

Particulars Sales Comapany A Company B Company C 600000.00 500000.00 200000.00 1). Find Missing Figures Company Formula Sales = Turnover * operating Assets NOI=Sales*Margin/100 AOA= NOI/ROI*100 Margin=NO1/Sales*100 Turnover=Sales/AOA ROINNOI/AVO*100 Net Operating Income (NOI) Average Operating Assets(AOA) (D=B/A*100) Margin (E=C/B) Turnover (F=B/C*100) Return on Investment (ROI) 84000.00 300000.00 14.00 2.00 28.00 70000.00 1000000.00 14.00 0.50 7.00 7000.00 100000.00 3.50 2.00 7.00 2). Residual Earning Formula Particulars Sales Net Operating Income (NOI) Average Operating Assets (AOA) Required Return of Investment (RRR) in % (E=C*D/100) Required Return of Investment in Amount (RRR in Amount) (F=B-E) Residual Earning (RE) 12000000.00 14000000.00 25000000.00 600000.00 560000.00 800000.00 3000000.00 7000000.00 5000000.00 14.00 10.00 16.00 420000.00 700000.00 800000.00 RRR in Amount=(AOA*RRR/100) RE=NOI-RRR in Amount 180000.00 -140000.00 0.00

Residual Earning for Division

A). 180000/-

B). -140000/-

C). 0/-