Question
E13.22 Zap is a retailer that specialises in electrical goods. It is a division of a large retail company. The follow data relate to the
E13.22 Zap is a retailer that specialises in electrical goods. It is a division of a large retail company. The follow data relate to the most recent year of operations: Profit $6,000,000 Sales revenue $75,000,000 Average invested capital $30,000,000 Required: 1. Calculate Zap's Return on Sales, Investment Turnover and Return on Investment 2. Use two component ratios to demonstrate two ways in which the manager of Zap could improve ROI, increasing it to 25%. (Assume due to competitive market forces, the sell price and sales quantities cannot be easily increased. i.e. Changes to the amount given for 'sales revenue' is not a valid solution.)
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