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ivolga24 [154]
3 years ago
11

A company’s shipping division (an investment center) has sales of $2,560,000, net income of $844,800, and average invested asset

s of $2,048,000. Compute the division’s profit margin and investment turnover.
Business
1 answer:
igomit [66]3 years ago
4 0

Answer:

Profit Margin = 33%

Investment Turnover = 1.25 times

Explanation:

Shipping division's profit margin = \frac{Net\:Income}{Net\: Sales} \times 100

Here, we have Net income = $844,800

Sales = $2,560,000

Therefore profit margin = \frac{844,800}{2,560,000} \times 100 = 33

Profit margin = 33%

Investment turnover = \frac{Net\: Sales}{Average\: Invested\: Assets}

Net Sales = $2,560,000

Average invested assets = $2,048,000

Investment turnover = \frac{2,560,000}{2,048,000} = 1.25

Therefore,

Profit Margin = 33%

Investment Turnover = 1.25 times

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