Question: Please answer in the following format: 41. Operating Profit Margin, As

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Please answer in the following format:

41. Operating Profit Margin, Asset Turnover, and Return on Investment (ROI). Financial information for Amador Sports, Inc., for the most recent fiscal year appears as follows. All dollar amounts are in thousands. Amador Sports, Inc the Curren t Fiscal Year [dell ar amounts ane in thousands) 30000 Cost of goods sold Gross margin Allocated ovethead Urom corporate Sellng and administrative expenses Operating ncome Income tax expense (30% rate) Net incoe 19.000 2.450 Amador Sports, Ine Segmented Balance Sheets Awerage Balances at End of t Fiscal Year dollar amounts are in thousands) Football Ending Beginning Ending Beginning 950 $ 1,020- 3,200 2.900 Accounts recovable 170 3,.30 7,800 760 Total current assets Property, plant and equipment inett Land (hold for sale) 4000 3,850 7.30016600 500 570 400 3,100 5 9350 59270 Lablities and owners equity Accounts payable 1,2001,150 cursent liablitic Totel current Eebilities 1.540 1,2200 750 1200 Total lablties Total owners equity 1,560 1,440 4750 4,300 9350 392708500 526,750 830 23 Total Iisbiltes and owners' equity Required: a. Calculate average operating assets for each division. (Hint: land held for sale is not an operating asset.) b. Calculate operating profit margin, asset turnover, and return on investment for each division c. What does this information tell us about each division?

Explanation / Answer

ans 1 Basket Ball Divisin Football Division Ending Bal A Beginning Bal B Ending Bal A Beginning Bal B Total assets $9,350 $9,270 $28,500 $26,750 Less: land held for sale 2000 2000 3150 3150 Total operating Assets $7,350 $7,270 $25,350 $23,600 Average Operating assets A+B/2 7310 24475 ans 2 Basket Ball Divisin Football Division Operating profit margin Operating Income/sales*100 1300/10000*100 3500/10000*100 13% 35% Asset Turnover Sales/Avg operating assets 10000/7310 10000/24475 1.37 0.41 ROI Operating profit margin 13*1.37 35*.41 Xasset Turnover 17.81 14.35 % ans c The ROI is better in Baskball division which shows that it is more efficient in using its assets in generating income/revenue.

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