Consider the following condensed financial statements of Sale Money, Inc. The company's target rate of retum is 10% the in to view the comparative balance sheet) the icon to view the income statement Read the reciments Requirement. Ce ROL Round all of your wen to four decimal po Begin by electing the formules culturetum on investment (RO), and then enter the amounts to co the company's Rol Round your actions four decimal praces and enter ROU Data Table 0 Requirements 1. Calculate the company's R. Round all your to four decimal places 2. Cate the company's pro marino Interpret your results 1. Calculate the company's slumover at interpret your results Une the expanded ROI fome to confirm your results from Requirement1 & Calathe compare your Sale Money, in Comparative Balance Sheet As of December 31, 2018 and 2017 2017 Asset Cash $ 70.000 $ 50.000 Accounts Receivable 55200 23.00 Supplies Property Plant, and mental 310.000 214.000 147.000 113,000 Total $ 87.000 413.000 Liabilities and Stockholders' Equity Accounts Payable $ 23.000 25.000 Short term Notes Payable 142.000 48.000 Long termes Payable 190.000 Common Stock now 214,000 212,000 Randamine 18.000 Total and Stockholders' Equity 5 587,000 $ 413.00 Print Safe Money, Inc. Income fatement For the Year Ended December 31, 2018 Nele Revue $ 2.000.000 Cost of Gross Prole 350.000 250.000 Operating income Oh none and (18.0001 Income Before Income Taxe 52.000 Income Tax Expense 28.700 Netice $ 53.90 Done 7500 Print Done Print Done Choose from a stor enterarumber in the input fields and then click Check Answer workid=565746975&questionid=6&flushed false&cid=60158248centerwineyes H24 6 of 74 complote) X Money Help Me Solve This Question Help urans Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet) Click the icon to view the income statement.) Read the requirements nt (ROI). As ur answer Divat Investment centers are typically large divisions of a company. The duties of an investment center manager any similar to those of a CEO The CEO is responsible for maximuring income, in relation to the company's invested capital, by using compafy assets officiently Likewise, investment center managers are responsible for not only generating profit, but also making the best use of the investment center's assets. In this exercise, we will examine some key performance indicators (KPIs) used for evaluating an investment center's performance Requirement 1. Calculate the company's ROI. Round all of your answers to four decimal places Return on investment (ROI) is one of the most commonly used KPIs for evaluating an investment center's financial performance. Rol is a measure of profitability and efficiency. It measures the amount of operating income an investment center cams relative to the amount of its average total assets. Calculate the average total assets using the information provided in the comparative balance sheet and complete the table below to calculate the company's ROI. (Round your final answer to the nearest hundredth of a percent, XXX%) Operating income Average total assets ROI $ 150,000 500,000 30% Requirement 2. Calculate the company's profit margin ratio. Interpret your results The profit margin ratio shows how much operating income the division carns on every $1.00 of sales, so this term focuses on profitability Management often isolates the profit margin ratio to determine if profit is driving ROI. The profit margin ratio is calculated by dividing operating income by net sales revenue Operating income Net sales revenue Profit margin ratio This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. ? terpret yo Interpret results arts les bes kn All parts showing Close 53,300 Total Liabilities ar Net Income Print Done as and then click Check Answer Clear All MacBook Pro =565746975&questionid=6&flushed=false&cid=6016824¢erwin yes -4 6 of 7 (4 complete) ey. Help Me Solve This Question Help sw Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet.) Click the icon to view the income statement.) Read the requirements Requirement 2. Calculate the company's profit margin ratio. Interpret your results. The profit margin ratio shows how much operating income the division earns on every $1.00 of sales, so this term focuses on profitability Management often isolates the profit margin ratio to determine if profit is driving ROI. The profit margin ratio is calculated by dividing operating income by net sales revenue Operating income Net sales revenue Profit margin ratio Now use the table below to calculate the company's profit margin ratio. (Round your final answer to the nearest hundredth of a percent, wer $ its Operating income Net sales revenue Profit margin ratio 150,000 7,500,000 Money Safo, Inc. is caring $ 0.02% -2% x $1.00) of operating income on each dollar of sales. Requirement 3. Calculate the company's asset turnover ratio. Interpret your results. The asset turnover ratio shows how efficiently a company uses its average total assets to generate sales. Rather than focusing on profitability, asset turnover focuses on efficiency Management often isolates the asset turnover to determine if that is what is driving the company's different ROI's. The asset tumover ratio is calculated by dividing net sales revenue by average total assets. Net sales revenue Average total assets Asset tumover ratio This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers, All parts showing Close 53,300 Total Liabilities Not Income Print Dono then click Check Answer Clear All kid=566746975&questionld68flushed-false&cid=60158248centerwin=yes 24 6 of 7 (4 completo) oney. Help Me Solve This Question Help answ Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet.) Click the icon to view the income statement.) RON Read the requirements Requirement 3. Calculate the company's asset turnover ratio. Interpret your results. The asset turnover ratio shows how efficiently a company uses its average total assets to generate sales. Rather than focusing on profitability, asset turnover focuses on efficiency Management often isolates the asset turnover to determine if that is what is driving the company's different ROI's. The asset turnover ratio is calculated by dividing net sales revenue by average total assets. Net sales revenue Average total assets Asset turnover ratio Now calculate the asset turnover ratio. Net sales revenue Average total assets Asset tumover ratio $ 7,500,000 500,000 15 swor et yo orets ults 1 The company's asset turnover ratio explains how efficiently a company uses its average total assets to generate sales. The company is generating $ 15 (=15 x $1.00) of sales with every dollar of average total assets. Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Return on investment (ROI) measures the amount of operating income an investment center cams relative to the amount of its assets. To determine what is driving a division's ROI, management often restates the ROI equation in its expanded form: Operating income Net sales revenue - ROI This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers, All parts showing Close 53,300 Total Labios Net Income Print Done then click Check Answer Clear All 565746975&questionid=6&flushed false&cid=6015824¢erwin=yes 6 of 7 (4 complete) Help Me Solve This Question Help Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet.) (Click the icon to view the income statement.) Read the requirements Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Return on investment (ROI) measures the amount of operating income an investment center earns relative to the amount of its assets. To determine what is driving a division's ROI, management often restates the ROI equation in its expanded form: Operating income Net sales revenue - ROI Net sales revenue Average total assets Notice that Net sales revenue is incorporated in the denominator of the first term, and in the numerator of the second term. When the two terms are multiplied together, Net sales revenue cancels out, leaving the original ROI formula. The first term in the equation is the profit margin ratio, and the second term is the asset turnover ratio. Let's use the amounts you calculated above and enter them in the expanded formula to calculate the ROI. The ROI calculated using the expanded formula should be the same as the ROI calculated in yo Requirement 1. although sometimes there are slight rounding differences et Using the expanded formula, calculate the ROI for the company Profit Margin Asset Turnover ROI 2% 15 30 % Review your answer with the basic ROI you calculated in Requirement 1. Do they agree? Requirements. Calculate the company's RI. Interpret your results. Dreifalinna IDR med min manat de financial man BI me the This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. ? All parts showing Close X X Total Liabilitie Net Income Print Done then click Check Answer Clear All ey. Help Me Solve This WE ROI 30% Question Help Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10%: (Click the icon to view the comparative balance sheet.) (Click the icon to view the income statement.) ). Read the requirements. Profit Margin * Asset Turnover 2% x 15 Review your answer with the basic ROI you calculated in Requirement 1. Do they agree? Requirement 5. Calculate the company's RI. Interpret your results. Residual income (RI) is commonly used for evaluating an investment center's financial performance. Rl measures the company's profitability and the efficiency with which the division uses its average total assets. Rl also incorporates another piece of information: top management's target rate of retum. The target rate of return is the minimum acce table rate of return that top management expects a company to earn with its average total assets. Rl is calculated with the following formula Operating income - (Average total assets Target rate of return) RI sf Now calculate the RI for Money Safe, Inc. (Enter the target rate as a percentage.) Operating income - (Average total assets X Target rate of return 150,000 - ($ 500,000 10 % ) $ 100,000 A positive RI means that the company is meeting or exceeding management's target rate of return. A negative RI means that the company is not meeting management's target rate of return. Review your calculation of Rl above to determine whether Money Safe, Inc. is meeting or falling short of management's expectations. wer yo RI $ x This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. All parts showing Close 53,300 Total Liabilitie Net Income Print Done then click Check Answer. ch Consider the following condensed financial statements of Sale Money, Inc. The company's target rate of retum is 10% the in to view the comparative balance sheet) the icon to view the income statement Read the reciments Requirement. Ce ROL Round all of your wen to four decimal po Begin by electing the formules culturetum on investment (RO), and then enter the amounts to co the company's Rol Round your actions four decimal praces and enter ROU Data Table 0 Requirements 1. Calculate the company's R. Round all your to four decimal places 2. Cate the company's pro marino Interpret your results 1. Calculate the company's slumover at interpret your results Une the expanded ROI fome to confirm your results from Requirement1 & Calathe compare your Sale Money, in Comparative Balance Sheet As of December 31, 2018 and 2017 2017 Asset Cash $ 70.000 $ 50.000 Accounts Receivable 55200 23.00 Supplies Property Plant, and mental 310.000 214.000 147.000 113,000 Total $ 87.000 413.000 Liabilities and Stockholders' Equity Accounts Payable $ 23.000 25.000 Short term Notes Payable 142.000 48.000 Long termes Payable 190.000 Common Stock now 214,000 212,000 Randamine 18.000 Total and Stockholders' Equity 5 587,000 $ 413.00 Print Safe Money, Inc. Income fatement For the Year Ended December 31, 2018 Nele Revue $ 2.000.000 Cost of Gross Prole 350.000 250.000 Operating income Oh none and (18.0001 Income Before Income Taxe 52.000 Income Tax Expense 28.700 Netice $ 53.90 Done 7500 Print Done Print Done Choose from a stor enterarumber in the input fields and then click Check Answer workid=565746975&questionid=6&flushed false&cid=60158248centerwineyes H24 6 of 74 complote) X Money Help Me Solve This Question Help urans Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet) Click the icon to view the income statement.) Read the requirements nt (ROI). As ur answer Divat Investment centers are typically large divisions of a company. The duties of an investment center manager any similar to those of a CEO The CEO is responsible for maximuring income, in relation to the company's invested capital, by using compafy assets officiently Likewise, investment center managers are responsible for not only generating profit, but also making the best use of the investment center's assets. In this exercise, we will examine some key performance indicators (KPIs) used for evaluating an investment center's performance Requirement 1. Calculate the company's ROI. Round all of your answers to four decimal places Return on investment (ROI) is one of the most commonly used KPIs for evaluating an investment center's financial performance. Rol is a measure of profitability and efficiency. It measures the amount of operating income an investment center cams relative to the amount of its average total assets. Calculate the average total assets using the information provided in the comparative balance sheet and complete the table below to calculate the company's ROI. (Round your final answer to the nearest hundredth of a percent, XXX%) Operating income Average total assets ROI $ 150,000 500,000 30% Requirement 2. Calculate the company's profit margin ratio. Interpret your results The profit margin ratio shows how much operating income the division carns on every $1.00 of sales, so this term focuses on profitability Management often isolates the profit margin ratio to determine if profit is driving ROI. The profit margin ratio is calculated by dividing operating income by net sales revenue Operating income Net sales revenue Profit margin ratio This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. ? terpret yo Interpret results arts les bes kn All parts showing Close 53,300 Total Liabilities ar Net Income Print Done as and then click Check Answer Clear All MacBook Pro =565746975&questionid=6&flushed=false&cid=6016824¢erwin yes -4 6 of 7 (4 complete) ey. Help Me Solve This Question Help sw Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet.) Click the icon to view the income statement.) Read the requirements Requirement 2. Calculate the company's profit margin ratio. Interpret your results. The profit margin ratio shows how much operating income the division earns on every $1.00 of sales, so this term focuses on profitability Management often isolates the profit margin ratio to determine if profit is driving ROI. The profit margin ratio is calculated by dividing operating income by net sales revenue Operating income Net sales revenue Profit margin ratio Now use the table below to calculate the company's profit margin ratio. (Round your final answer to the nearest hundredth of a percent, wer $ its Operating income Net sales revenue Profit margin ratio 150,000 7,500,000 Money Safo, Inc. is caring $ 0.02% -2% x $1.00) of operating income on each dollar of sales. Requirement 3. Calculate the company's asset turnover ratio. Interpret your results. The asset turnover ratio shows how efficiently a company uses its average total assets to generate sales. Rather than focusing on profitability, asset turnover focuses on efficiency Management often isolates the asset turnover to determine if that is what is driving the company's different ROI's. The asset tumover ratio is calculated by dividing net sales revenue by average total assets. Net sales revenue Average total assets Asset tumover ratio This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers, All parts showing Close 53,300 Total Liabilities Not Income Print Dono then click Check Answer Clear All kid=566746975&questionld68flushed-false&cid=60158248centerwin=yes 24 6 of 7 (4 completo) oney. Help Me Solve This Question Help answ Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet.) Click the icon to view the income statement.) RON Read the requirements Requirement 3. Calculate the company's asset turnover ratio. Interpret your results. The asset turnover ratio shows how efficiently a company uses its average total assets to generate sales. Rather than focusing on profitability, asset turnover focuses on efficiency Management often isolates the asset turnover to determine if that is what is driving the company's different ROI's. The asset turnover ratio is calculated by dividing net sales revenue by average total assets. Net sales revenue Average total assets Asset turnover ratio Now calculate the asset turnover ratio. Net sales revenue Average total assets Asset tumover ratio $ 7,500,000 500,000 15 swor et yo orets ults 1 The company's asset turnover ratio explains how efficiently a company uses its average total assets to generate sales. The company is generating $ 15 (=15 x $1.00) of sales with every dollar of average total assets. Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Return on investment (ROI) measures the amount of operating income an investment center cams relative to the amount of its assets. To determine what is driving a division's ROI, management often restates the ROI equation in its expanded form: Operating income Net sales revenue - ROI This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers, All parts showing Close 53,300 Total Labios Net Income Print Done then click Check Answer Clear All 565746975&questionid=6&flushed false&cid=6015824¢erwin=yes 6 of 7 (4 complete) Help Me Solve This Question Help Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10% (Click the icon to view the comparative balance sheet.) (Click the icon to view the income statement.) Read the requirements Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Return on investment (ROI) measures the amount of operating income an investment center earns relative to the amount of its assets. To determine what is driving a division's ROI, management often restates the ROI equation in its expanded form: Operating income Net sales revenue - ROI Net sales revenue Average total assets Notice that Net sales revenue is incorporated in the denominator of the first term, and in the numerator of the second term. When the two terms are multiplied together, Net sales revenue cancels out, leaving the original ROI formula. The first term in the equation is the profit margin ratio, and the second term is the asset turnover ratio. Let's use the amounts you calculated above and enter them in the expanded formula to calculate the ROI. The ROI calculated using the expanded formula should be the same as the ROI calculated in yo Requirement 1. although sometimes there are slight rounding differences et Using the expanded formula, calculate the ROI for the company Profit Margin Asset Turnover ROI 2% 15 30 % Review your answer with the basic ROI you calculated in Requirement 1. Do they agree? Requirements. Calculate the company's RI. Interpret your results. Dreifalinna IDR med min manat de financial man BI me the This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. ? All parts showing Close X X Total Liabilitie Net Income Print Done then click Check Answer Clear All ey. Help Me Solve This WE ROI 30% Question Help Consider the following condensed financial statements of Safe Money, Inc. The company's target rate of return is 10%: (Click the icon to view the comparative balance sheet.) (Click the icon to view the income statement.) ). Read the requirements. Profit Margin * Asset Turnover 2% x 15 Review your answer with the basic ROI you calculated in Requirement 1. Do they agree? Requirement 5. Calculate the company's RI. Interpret your results. Residual income (RI) is commonly used for evaluating an investment center's financial performance. Rl measures the company's profitability and the efficiency with which the division uses its average total assets. Rl also incorporates another piece of information: top management's target rate of retum. The target rate of return is the minimum acce table rate of return that top management expects a company to earn with its average total assets. Rl is calculated with the following formula Operating income - (Average total assets Target rate of return) RI sf Now calculate the RI for Money Safe, Inc. (Enter the target rate as a percentage.) Operating income - (Average total assets X Target rate of return 150,000 - ($ 500,000 10 % ) $ 100,000 A positive RI means that the company is meeting or exceeding management's target rate of return. A negative RI means that the company is not meeting management's target rate of return. Review your calculation of Rl above to determine whether Money Safe, Inc. is meeting or falling short of management's expectations. wer yo RI $ x This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. All parts showing Close 53,300 Total Liabilitie Net Income Print Done then click Check Answer. ch
