10.14

The condensed income statement for the Panera of Tri-State Industries Inc. is as follows (assuming no support department charges):

Sales	$200,000,000
Cost of goods sold	107,900,000
Gross profit	$92,100,000
Administrative expenses	66,900,000
Operating income	$25,200,000

The manager of the Panera is considering ways to increase the return on investment.

Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $140,440,000 of assets have been invested in the Consumer Products Division. Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places.

Profit margin	____%
Investment turnover	_____
Rate of return on investment	____%

If expenses could be reduced by $3,400,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places.

1. Profit margin	____%
   Investment turnover	___
   Rate of return on investment	___%