Divisional Performance Analysis and Evaluation The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: 2. Using the Dupont formuta for return on investment, determine the pefit margin, Investment turnover, and rate of return on investment for each division. If required round your answers to one decimal place. 3. If management desires a minimum acceptable return of 19%, determine the residual income for each division. If required, use the minus sign to indicate a negative income. 4. On the basis of income from operations, the I Division is the more proftable of the two divisions. However, income from operations consider the amount of invested assets in each division. On the basis of residual income, the of the two divisions. Division is the more profitable remen rowionwork 2. Income from operabions divided by sales equals profit margin Ssles divided by invested assets equals investment turnover. Multiply these two values for the rate of return. 3. Multiply 19% by the invested assets; then subtract the minimum acceptabie income from income from operations. 4. Compare the results for the two divisions, Consider the components of the ratios: Divisional Performance Analysis and Evaluation The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: 2. Using the Dupont formuta for return on investment, determine the pefit margin, Investment turnover, and rate of return on investment for each division. If required round your answers to one decimal place. 3. If management desires a minimum acceptable return of 19%, determine the residual income for each division. If required, use the minus sign to indicate a negative income. 4. On the basis of income from operations, the I Division is the more proftable of the two divisions. However, income from operations consider the amount of invested assets in each division. On the basis of residual income, the of the two divisions. Division is the more profitable remen rowionwork 2. Income from operabions divided by sales equals profit margin Ssles divided by invested assets equals investment turnover. Multiply these two values for the rate of return. 3. Multiply 19% by the invested assets; then subtract the minimum acceptabie income from income from operations. 4. Compare the results for the two divisions, Consider the components of the ratios
