CommercialServices.com Corporation provides business-to-business services on the

Question

CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:

6.

Compute the company's margin, turnover and return on investment (ROI). (Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

7.

The entrepreneur who founded the company is convinced that sales will increase next year by 160% and that net operating income will increase by 420%, with no increase in average operating assets. What would be the company’s ROI? (Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

8.

The Chief Financial Officer of the company believes a more realistic scenario would be a $3,000,000 increase in sales, requiring a $1,020,000 increase in average operating assets, with a resulting $671,760 increase in net operating income. What would be the company’s ROI in this scenario?(Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:

Explanation / Answer

Commercial Services.com Current Situation                    6 Details Amt $ a Sales             11,880,000 b Net Opearting Income             1,069,200 c Margin =b/a= 9.00% d Average Operating Assets               2,700,000 e Turnover =a/d=                        4.40 f ROI % =Margin *Turnover = 39.60%                    7 Given details Details Amt $ a Sales             19,008,000 b Net Opearting Income             4,490,640 c Margin =b/a= 23.63% d Average Operating Assets               2,700,000 e Turnover =a/d=                        7.04 f ROI % =Margin *Turnover = 166.32%                    8 Given details Details Amt $ a Sales             14,880,000 b Net Opearting Income             1,740,960 c Margin =b/a= 11.70% d Average Operating Assets               3,720,000 e Turnover =a/d=                        4.00 f ROI % =Margin *Turnover = 46.80%

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