aAnswer:
Note: See the lower part of the attached excel for the table for the answer.
Explanation:
In the attached excel file, the following calculations are done:
(a) Operating income = Sales * Profit margin = $6,000,000 * 20% = $1,200,000
(b) Invested assets = Operating income / Return on investment = $1,200,000 / 16% = $7,500,000
(c) Investment turnover = Return on investment / Profit margin = 16% / 20% = 0.80 times
(d) Sales = Operating income / Profit margin = 1,512,000.00 / 12% = $12,600,000
(e) Investment assets = Sales / Investment turnover = $12,600,000 / 1.40 = $9,000,000.00
(f) Return on investment = Investment turnover * Profit margin = 1.40 * 12% = 16.80%
(g) Operating income = Invested assets * Return on investment = $11,000,000 / 17.50% = $1,925,000
(h) Profit margin = (Operating income / Sales) * 100 = ($1,925,000 / $13,750,000) * 100 = 14.0%
(i) Investment turnover = Return on investment / Profit margin = 17.50% / 14.0% = 1.25 times
(j) Return on investment = (Operating income / Invested assets) * 100 = ($840,000 / $3,500,000) * 100 = 24.0%
(k) Profit margin = (Operating income / Sales) * 100 = ($840,000 / $5,250,000) * 100 = 16.0%
(l) Investment turnover = Return on investment / Profit margin = 24.0% / 16.0% = 1.50
