Question

Answer 1

Fill missing amount

	Smith Inc	Sweeney Company	Calloway industries
Sales	116000	117900*100/15 = 786000	530000
Operating income	46400	117900	530000*12% = 63600
Total assets	80000	117900*100/72 = 163750	63600*100/30 = 212000
Sales margin	46400/116000 = 40%	15%	12%
Capital turnover	116000/80000 = 1.45	4.80	30/12 = 2.5
Return on investment	40%*1.45 = 58%	15*4.8 = 72%	30%
Target rate of return	12%	20%	(63600-19080)/212000 = 21%
Residual income	46400-(80000*12%) = 36800	117900-(163750*20%) = 85150	19080