Homework Answers
Answer of Part a:
Profit Margin = Income from Operations / Sales *100
Profit Margin = $55,440 / $616,000 *100
Profit Margin =
9%
Answer of Part b:
Investment Turnover = Sales / Invested Assets
Investment Turnover = $616,000 / $176,000
Investment Turnover =
3.5 times
Answer of Part c:
Return on Investment = Profit Margin * Investment Turnover
Return on Investment = 9% * 3.5
Return on Investment =
31.5%
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