Gaal Industries is a division of a major corporation. Last year the division had

Question

Gaal Industries is a division of a major corporation. Last year the division had total sales of $23,826,400, net operating income of $2,835,342, and average operating assets of $9,164,000. The company's minimum required rate of return is 19%.

What is the division's margin? (Round your answer to 2 decimal places.)

What is the division's turnover? (Round your answer to 2 decimal places.)

What is the division's return on investment (ROI)? (Round your answer to 2 decimal places.)

Gaal Industries is a division of a major corporation. Last year the division had total sales of $23,826,400, net operating income of $2,835,342, and average operating assets of $9,164,000. The company's minimum required rate of return is 19%.

Explanation / Answer

Divisions margin=net operating income/ sales

                           = 2,835,342/23,826,400

                          =11.0%

Divisions turnover= Sales / Assets = Asset Turnover
23,826,400 / 9,164,000

=2.6

ROI= (revenue cost of goods sold) / cost of goods sold

Cost of good sold=$23,826,400-2,835,342

=20,991,058

ROI=2,835,342/20991058

=0.135

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