Question

Heavey Fabrication is a division of a major corporation Data concerning the most recent year appear below. Total sales Net operating Income Average operating assets Amount 21,120,000 2,606,400 6,eee eee Required: 1. Calculate the profit margin (Round your percentage to one decimal place, for example 0357 15 26%) 2 Calculate the investment turnover. (Round to one decimal place.) 3. Calculate the return on investment. (Round your percentage to one decimal place.) 4. The CFO of the company thinks a possible scenario for next year would be a $10 million Increase in sales, requiring a 54 milion Increase in average operating assets, with a resulting $1.5 million Increase in net operating Income. What would be the company's ROI under this scenario? (Round your percentage to one decimal place.) Complete this question by entering your answers in the tabs below. Requires : Required 2 Required) Required a Calculate the profit margin. (Round your answer to 1 decimal place. The nearest tenth of a percent.) Profit margin Required 2 >

Answer 1

total sales net operating income average operating assets 21120000 2006400 6000000 1 profit margin 2 investment turnover 3 Return on investment 9.5% 3.5 33.4% 31120000 newsales=21,120,000+10,000,000 net operating income = 2006400+1500000 average operating assets =6,000,000+4,000,000 3506400 10000000 Return on investment = net operating income /average 4 operating assets *100 35.1%