CommercialServices.com Corporation provides business-to-business services on the
ID: 2416964 • Letter: C
Question
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
Required:
1. Compute the company's margin, turnover and return on investment (ROI).
2. The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What would be the company’s margin, turnover and ROI? (Do not round intermediate calculations.)
3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring a $250,000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the company’s margin, turnover and ROI in this scenario? (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%).)
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Sales 3,000,000.00 Net operating income 150,000.00 Average operating assets 750,000.00 Company's margin =150,000/3000,000 5.00% Turnover = 3m/750,000 4.00 ROI =5%*4 20.00% 2) Sales = 3m*1.50 4,500,000.00 Net operating income =150,000 + 150,000*200% 450,000.00 Average operating assets 750,000.00 Company's margin =450,000/4500,000 10.00% Turnover = 4.5m/750,000 6.00 ROI =10%*6 60.00% 3) Sales =3m + 1m 4,000,000.00 Net operating income =150,000 + 200,000 350,000.00 Average operating assets = 750,000 + 250,000 1,000,000.00 Company's margin =350,000/4m 8.75% Turnover = 4m/1m 4.00 ROI =8.75%*4 35.00%
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