Company A is operating more efficiently
Step-by-step explanation:
Given parameters:
Division A:
Sales = $180,000
Net income = $18,000
Average assets = $72,000
Division B:
Sales = $60,000
Net income = $9,600
Average assets = $48,000
Unknown:
Division operating more efficiently = ?
Solution:
Efficiency measures the relationship between the output from a business and the input into it. Here, the efficiency is the relationship between the net income and the average assets. it can be expressed as a percentage or ratio.
The net income is the profit derived from sales of a company's products.
The higher the value the more efficient a company is.
Efficiency = x 100
Efficiency of division A = x 100 = 25%
Efficiency of division B = x 100 = 20%
Division A has a higher efficiency compared to B
Learn more:
Economic goals brainly.com/question/8951463
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