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Homework answers / question archive / Company recently had a computer malfunction and lost a portion of its accounting records
Company recently had a computer malfunction and lost a portion of its accounting records. The company has reconstructed some of its financial performance measurements including components of the return on investment calculations. Required: Help Krall rebuild its information database by completing the following table: (Do not round your intermediate calculations. Round your final answers to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%...) Return on Investment Profit Margin % % Investment Operating Income Turnover Average Invested Sales Revenue Assets S 49,000.00 $ 715,000.00 $ 1,530,000.00 0.40 S 95,976.00 S 2,580,000.00 1.60 S 2,560,000.00 2.35 S 510,000.00 % 9.30 % 15.60 % % 12.40 % %
Answer:
In the format given in question:
Here:
Investment turnover = Sales revenue / average invested assets
Profit margin = Operating income / sales revenue
Return on investment = Profit margin x investment turnover
Sales revenue = Average invested assets x investment turnover
Average invested assets = Sales revenue / Investment turnover
| Return on Investment | Profit Margin | Investment Turnover | Operating income | Sales Revenue | Average Invested Assets |
| 3.3% {7% x 0.47} |
6.9% or 7% {$49,000 / $715,000} |
0.47 {$ 715,000 / $ 1,530,000} |
$ 49,000 | $ 715,000 | $ 1,530,000 |
| 3.72% {9.30% x 0.4} | 9.30 % | 0.40 | $ 95,976 | $ 1,032,000 {$2,580,000 x 0.40} | $ 2,580,000 |
|
25% (Round off) {15.6% x 1.6} |
15.60 % | 1.60 | $ 399,360 {$2,560,000 x 15.6%} | $ 2,560,000 |
$1,600,000 {$2,560,000/1.60} |
| 12.40 % |
5.28% {$26,910/$510,000} |
2.35 |
$ 26,910 {$217,021 x 12.40%} |
$ 510,000 | $ 217,021.28 {$510,000/2.35} |
