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E13.22 Components of ROI; improving ROI; residual income: retailer LO 13.1, 13.4 Shox is a retailer that specialises in electrical goods. It is a division
E13.22 Components of ROI; improving ROI; residual income: retailer LO 13.1, 13.4 Shox is a retailer that specialises in electrical goods. It is a division of a large retail company. The following data relate to the most recent year of operations: Profit Sales revenue Average invested capital $ 4 000 000 50 000 000 20 000 000 Required 1. Calculate Shox's return on sales, investment turnover and return on investment. 2. Use the two component ratios to demonstrate two ways in which the manager of Shox could improve ROI, increasing it to 25 per cent. 3. Assume that the retail company has a minimum required rate of return of 12 per cent. Calculate the residual income of Shox
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