Answer:
(a) 12.20%
(b) 3.40 times
(c) 41.48%
Explanation:
(a). The formula of division's margin is shown below:
It shows a ratio of net operating income and total sales
= Net operating income ÷ total sales
= $2,903,600 ÷ $23,800,000
= 12.20%
(b) The formula of division's turnover is shown below:
It shows a ratio of total sales and average operating assets
= Total sales ÷ Average operating assets
= $23,800,000 ÷ $7,000,000
= 3.40 times
(c) The formula of division's return on investment is shown below:
It shows a ratio of net operating income and average operating assets
= Net operating income ÷ average operating assets
= $2,903,600 ÷ $7,000,000
= 41.48%
Hence,
(a) 12.20%
(b) 3.40 times
(c) 41.48%
