Question

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole number.)

	Company A B C Sales $430,000 $730,000 $600,000 Net operating income $54,000 Average operating assets $167,000 $145,000 Return on investment (ROI) 23 % 21 % % Minimum required rate of return: Percentage 15 % % 9 % Dollar amount $54,000 Residual income $8,000

Answer 1

	Company A B C Sales $430,000 $730,000 $600,000 Net operating income 167000*23% = 38410 $54,000 21050 Average operating assets $167,000 54000*100/21 = 257143 $145,000 Return on investment (ROI) 23 % 21 % 21050/145000 = 15 % Minimum required rate of return: Percentage 15 % 21% % 9 % Dollar amount 167000*15% = 25050 $54,000 145000*9% = 13050 Residual income 38410-25050 = 13360 54000-54000 = 0 8000