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all requirements Big Kid Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a
all requirements
Big Kid Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 22% target rate of return. Read the requirements. Requirement 1. Calculate each division's ROI. First enter the formula, then calculate the ROI for each division. (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, X.XX\%.) Data table Requirements Round all calculations to two decimal places. The company is segmented into five divisions: Paint Stores (branded 1. Calculate each division's ROI. retail location), Consumer (paint sold through stores such as Home Depot and Lowe's), Automotive (sales to auto manufacturers), 2. Calculate each division's sales margin. Interpret your results. International, and Administration. The following is selected hypothetical 3. Calculate each division's capital turnover. Interpret your results. divisional information for the company's two largest divisions: Paint 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Stores and Consumer (in thousands of dollars). 5. Calculate each division's RI. Interpret your results and offer recommendations for any division with negative RI. 6. Total asset data were provided in this problem. If you were to gather this information from an annual report, how would you measure total assets? Describe your measurement choices and some of the pros and cons of those choices. 7. Describe some of the factors that management considers when setting its minimum target rate of return. 8. Explain why some firms prefer to use RI rather than ROI for performance measurement. 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centersStep by Step Solution
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