I need help in part 2 of the question, PLEASE!!! COULD YOU SHOW THE STEPS ? Divi

Question

I need help in part 2 of the question, PLEASE!!! COULD YOU SHOW THE STEPS ?

Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Electronic Brokerage Division Investment Banking Division Mutual Fund Division Fee revenue Operating expenses Invested The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. $2,050,000 1,105,000 assets 7,500,000 $2,120,000 892,400 6,200,000 $2,070,000 1,566,000 4,200,000

Explanation / Answer

Solution 2:

Operating income = Fee revenue - operating expenses

Mutual fund division = $2,050,000 - $1,105,000 = $945,000

Electronic brokerage division = $2,120,000 - $892,400 = $1,227,600

Investment banking division = $2,070,000 - $1,566,000 = $504,000

Profit Margin - E.F Lynch Company Particulars Choose Numerator / Choose denomerator = Profit Margin Details Amount Details Amount Mutual fund division Operating Income $945,000.00 Sales $2,050,000.00 46.1% Electronic Brokerage division Operating Income $1,227,600.00 Sales $2,120,000.00 57.9% Investment banking division Operating Income $504,000.00 Sales $2,070,000.00 24.3%

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