Question: GlennCo segments its company into four distinct divisions. The net revenues, operating profit, and total assets for these divisions are disclosed in the footnotes to
GlennCo segments its company into four distinct divisions. The net revenues, operating profit, and total assets for these divisions are disclosed in the footnotes to GlennCos consolidated financial statements. Which are presented here.
Requirements
1. What are GlennCos four business divisions? Make a table listing each division, its net revenues, operating profit, and total assets.
2. Use the data you collected in Requirement 1 to calculate each divisions profit margin. Interpret your results.
3. Use the data you collected in Requirement 1 to calculate each divisions asset turnover. Interpret your results.
4. Use the data you collected in Requirement 1 to calculate each divisions ROI. Interpret your results.
5. Can you calculate RI and/or EVA using the data presented? Why or why not?
Note to Consolidated Financial Statements
Note 1 Basis of Presentation and Our Divisions:
We manufacture, market, and sell a variety of products through our divisions, including furniture and fixtures for the home, office, stores, and health-care facilities. The accounting policies are the same for each division. There is, however, one exception. GlennCo centrally manages commodity derivatives and does not allocate any gains and losses incurred by these contracts to individual divisions. These derivatives are used to hedge the underlying price risk to the commodities used in production. The resulting gains and losses from these contracts are recorded under corporate expenses rather than allocated to specific divisions. Corporate includes the costs of our corporate headquarters, centrally managed initiatives, and certain gains and losses that cannot be accurately allocated to specific divisions, such as derivative gains and losses. Corporate Assets consist of cash, short-term investments, and property, plant, and equipment. The corporate property, plant, and equipment includes the headquarters building, equipment within, and the surrounding property.
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Net Revenue and rating Profit Operating Profit 2009 Net Revenue 2010 2008 Home furnishings. $11,250 $10,150 9,750 $3,150 $2,875 $2,325 8,300 1,995 1,815 1,755 12,750 11,550 11,050 1,785 1,645 1,585 435 35,000 31,650 30,350 7,410 6,790 6,100 2010 2009 2008 Office furniture 8,600 Health-care furnishings..1,5000 Total division 480 455 330) 90) (245) ra Total $35,000 $31,650 $30,350 $7,080 $6,500 5,855 Total Assets and Other Information mortization of Intangible Assets Depreciation & Other Amortization 2010 2009 2008 2010 2009 Home furnishings Office furniture.. Store 415 260 410 2008 $ 420 255 370 16 $11 42.5 280 465 72 67 Total division 170 155 158 1,135 1,092 ra Total $170 $155 $158 $1,230 $1,155 Capital Spending 2009 Total Assets 2010 2009 2008 2010 2008 Home furnishings7,500 6,250 5,750 495 $ 505 S 465 Office furniture Store displays Health-care furnishings Total division 275 560 25 26,475 23,225 22,075 1,880 1,550 1,325 100 $28,185 $28,495 $25,545 $2,090 1,765 S1,425 6,800 9,025 500 330 7,600 10,625 7,000 9,425 550 500 865 695 3U /50 1,710 5,270 3,470 215 ra Total
Step by Step Solution
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Req 1 Millions of dollars Net Revenue Operating Profit Total Assets Home furnishings 11250 3150 7500 Office furniture 9500 1995 7600 Store displays 12... View full answer
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