Question

Provide the missing data in the following table for a distributor of martial arts products: (Enter "Turnover" and "ROI" answers to 1 decimal place.)

Division Alpha Bravo Charlie 310,000 Sales Net operating income $ $ 57,640 37,200 $ 355,000 Average operating assets 6% 11 % Margin Turnover 5.0 Return on investment 30.0% 22.0% (ROI)

Answer 1

Answer Division Bravo Charlie Alpha $1,775,000 Sales $310,000 $37,200 $524,000 $57,640 Net Operating Income $106,500 $355,000 $124,000 $262,000 Average Operating Assets Margin 6% 12% 11% Turnover 5.0 2.5 Return on Investment (ROI) 30% 30% 22%

Explanations Alpha Turnover = Net Sales / Average Operating Assets Net Sales = Turnover x Average Operating Assets = 5.0 x $355,000 = $1,775,000 Charlie Margin = Net Income / Net Sales Net Sales - Net Income / Margin = $57,640 / 11% = $524,000 Margin = Net Income / Net Sales Net Income = Net Sales x Margin = $1,775,000 x 6% = $106,500 Return on Investment (ROI) = Net Operating Income / Average Operating Assets Average Operating Assets = Net Operating Income / Return on Investment (ROI) = $57,640 / 22% = $262,000 Return on Investment (ROI) = (Net Operating Income / Sales) x (Sales / Average Operating Assets) = ($106,500 / $1775,000) x ($1,775,000 / $355,000) = 30% Turnover = Net Sales / Average Operating Assets = $524,000 / $262,000 = 2 Bravo Margin = Net Income / Net Sales = $37,200 / $310,000 = 12% Return on Investment (ROI) = Net Operating Income / Average Operating Assets Average Operating Assets = Net Operating Income / Return on Investment (ROI) = $37,200 / 30% = $124,000 Turnover = Net Sales / Average Operating Assets = $310,000 / $124,000 = 2.5