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Driver Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two
Driver Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: E (Click the icon to view the information.) Read the requirements 1. Compute each division's sales margin. Interpret your results. (Enter the sales margin as a percent rounded to the nearest whole percent.) The Snow Sports division's sales margin is %. Data Table The Non-Snow Sports division's sales margin is %. Interpret your results. Based on the divisions' sales margins, we know that the sales margins the divisions had different ROI's. Sales Operating Income Total Assets Current Liabilities Snow Sports $ 5,800,000 $ 986,000 $ 4,900,000 $ 410,000 Non-Snow Sports $ 8,600,000 $ 1,462,000 $ 7,000,000 $ 660,000 Driver's management has specified a target 17% rate of return. 2. Compute each division's capital turnover (round to two decimal places). Interpret your results. The Snow Sports division's capital turnover is times The Non-Snow Sports division's capital turnover is times. Print Done Interpret your results. Based on the divisions' capital turnover rates, we know that the rates the divisions had different ROI's. 3. Use your answers to Question 2 along with your answers to Question 1 to recalculate ROI using the expanded formula. Do your answers agree to the ROI calculations using the original formula and presented in the divisional information? (Enter the ROI as a percentage rounded to the nearest tenth of a percent, X.X%.) The Snow Sports division's ROI using the expanded formula is The Non-Snow Sports division's ROI using the expanded formula is %. Do your answers agree with the basic ROI presented in the divisional information
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