Dynamite limited is a private company where a financial performance evaluation is to take place. The management accounting department advised the management to use Return on Investment to carry out the exercise. Table below provides the data for 2020 that could be used for the analysis

Data items

$

Cash

24,500

Supplies

1,870

Account receivable

28,560

Prepaid Expense

8,500

Inventory

15,800

Plant

120,000

Property

260,000

Equipment

95,000

Accumulated Depreciation- Equipment

25,000

Accumulated Depreciation -Property

7,900

Unearned Revenue

45,000

Sales

145,000

Cost of goods sold

38,500

Operating expenses:

$

Salary expenses

25,800

Supplies Expense

8,400

Utilities expense

12,000

Depreciation Expense

11,300

Rent expense

9,100

Interest Expenses

16,200

Operating Assets for year 2019

330,000

The company is taxed at 18% Show all your calculations

REQUIRED

1. Calculate the

2. Calculate

3. Calculate

4. Calculate using the information on the table

for 2020 of the current year.

operating profit (EBIT)

net income

the Average Operating Assets

the ROI

5. Find

6. Explain why the two component method of calculating ROI is more

useful.

7. What component has contributed the most in 2020 to the ROI of this

company

8. What are the major weaknesses of ROI?