Data Table Residential Net Sales Revenue Operating Income Average Total Assets $ 540,000 $ 64,350 $ 198,000 1,080,000 163,200 408,000 Professional Management has a 27% target rate of return for each division. IC . an Print Done Requirements 1. 2. Calculate each division's ROI. Round all of your answers to four decimal places. Calculate each division's profit margin ratio. Interpret your results. Calculate each division's asset turnover ratio. Interpret your results. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? 3. 4. Print Done (E Zoes, a national manufacturer of lawn mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year: Click the icon to view the information.) Read the requirements. Requirement 1. Calculate each division's ROI. Round all of your answers to four decimal places. Begin by selecting the formula to calculate return on investment (ROI), and then enter the amounts to calculate each division's ROI. (Enter your answer as a percent rounded to two decimal places, X.XX%) ROI Residential Professional Requirement 2. Calculate each division's profit margin ratio. Interpret your results. Begin by selecting the formula to calculate profit margin ratio, and then enter the amounts to calculate each division's profit margin ratio. (Enter each profit margin ratio as a percent rounded to two decimal places, X.XX%.) Profit margin ratio % Residential = Professional % of The residential division is earning about $ of operating income on each dollar of net sales revenue whereas the professional division is earning about $ operating Income on each dollar of net sales revenue. The higher profit margin ratio helps to account for its higher ROI. Requirement 3. Calculate each division's asset turnover ratio. Interpret your results. (Round your answer to two decimal places, XXX.) = Asset turnover ratio Residential Professional The residential division is generating about of net sales revenue for each dollar of average total assets invested. The professional division is generating about of net sales revenue for every dollar of average total assets. The is more efficient C Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? (Enter your answers as a percent rounded to two decimal places, X.XX%.) First, select the expanded ROI formula. x ROI The ROI for the residential division is % Does your answer above agree with the basic Rol for the residential division you calculated in Requirement 1? The ROI for the professional division is % Does your answer above agree with the basic ROI for the professional division you calculated in Requirement 1? Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? (Enter your answers as a percent rounded to two decimal places, X.XX%) First, select the expanded ROI formula ROI The ROI for the residential division is % Does your answer above agree with the basic ROI for the residential division you calculated in Requirement 1? The ROI for the professional division is No Yes, with possible slight rounding differences Does your answer above agree with the basic ROI for the professional division you calculated in Requirement 1
