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ABC Company operates two divisions with the following operating information for the month of May:

Division 1: sales, $120,000; operating income, $36,000; operating assets, $300,000.
Division 2: sales, $80,000; operating income, $40,000; operating assets, $400,000.

ABC Company expects a minimum return of 10% should be earned from all investments.

Required:
a. Prepare ABC Company’s ROI analysis using the DuPont model for each division. (Round Turnover rate answers to one decimal place.)Division 1 Division 2 DuPont Performance Analysis: Revenues Operating Income Operating Assets Margin Turnover ROI % turns tur

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Answer #1

Margin = ( Operating income * 100 ) / Sales Turnover = [ Sales / Operating assets ] ROI = ( Operating Income * 100 ) / )perat

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