Divisional Income Statements and Return on Investment Analysis

1. E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:

   	Mutual Fund Division		Electronic Brokerage Division		Investment Banking Division
   Fee revenue	$2,100,000		$2,190,000		$2,070,000
   Operating expenses	1,129,800		1,038,000		1,566,000
   Invested assets	7,700,000		6,400,000		4,200,000

   The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.

   Required:

   I've already done part 1, I just need help with part 2. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges.

   E.F. Lynch Company
   Divisional Income Statements
   For the Year Ended June 30, 20Y8
   	Mutual Fund Division	Electronic Brokerage Division	Investment Banking Division
   Fee revenue	$	$	$
   Operating expenses
   Income from operations	$	$	$

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   1. For each division, subtract operating expenses from fee revenue.

   Learning Objective 4.

   2. Using the DuPont formula for rate of return on investment, compute the profit margin, investment turnover, and rate of return on investment for each division. Round your answers to one decimal place.

   Division	Profit Margin	Investment Turnover	ROI
   Mutual Fund Division	%		%
   Electronic Brokerage Division	%		%
   Investment Banking Division	%		%