Question
Decors Inc. (HBI) manufactures household goods in the Laguna. The company made two acquisitions in previous years to diversify their product lines. In 2019, Decors
Decors Inc. (HBI) manufactures household goods in the Laguna. The company made two acquisitions in previous years to diversify their product lines. In 2019, Decors acquired cosmetics and consumer electronics companies. Decors is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of pesos) presents operating revenues, operating income, and invested assets of the company over the last three years:
Revenue | Operating Income | Assets | ||||||||||||||||
Cosmetics | ||||||||||||||||||
2020 | P | 24,500 | P | 2,300 | P | 10,000 | ||||||||||||
2021 | 22,500 | 1,900 | 10,000 | |||||||||||||||
2022 | 19,600 | 1,800 | 9,500 | |||||||||||||||
Household | ||||||||||||||||||
2020 | 17,400 | 1,300 | 7,500 | |||||||||||||||
2021 | 15,300 | 1,100 | 8,000 | |||||||||||||||
2022 | 12,500 | 900 | 6,500 | |||||||||||||||
Electronics | ||||||||||||||||||
2020 | 13,500 | 1,500 | 4,500 | |||||||||||||||
2021 | 9,500 | 1,100 | 4,500 | |||||||||||||||
2022 | 8,700 | 1,050 | 4,300 | |||||||||||||||
Household Brands Total | ||||||||||||||||||
2020 | 55,400 | 5,100 | 22,000 | |||||||||||||||
2021 | 47,300 | 4,100 | 22,500 | |||||||||||||||
2022 | 40,800 | 3,750 | 20,300 | |||||||||||||||
The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company. The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets. Round all calculations to two significant digits.
1. The total amount of the bonus pool for 2020 is:
2. The total amount of the bonus pool for 2021 is
3. The total amount of the bonus pool for 2022 is
4. Return on assets for the cosmetics division in 2020 is
5. Return on sales in the household division in 2021 is (rounded):
6. Asset turnover in the electronics division in 2022 is (rounded):
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