Question

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,200,000 $ 22,000,000 Net operating income $ 552,000 $ 1,760,000 Average operating assets $ 2,300,000 $ 11,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. (Do not round intermediate calculations. Enter your answers as a percent (i.e., 0.12 should be entered as

Answer 1

Answer

--All working forms part of the answer

Working		Osaka	Yokohama
A	Sales	$9,200,000	$22,000,000
B	Net Operating Income	$552,000	$1,760,000
C	Average Operating assets	$2,300,000	$11,000,000
D = [B/A] x 100	Margin	6%	8%
E = A/C	Turnover	4	2
F = [B/C] x 100 or D x E	Return on Investment [ROI]	24%	16%