Question
Genre Go is a retailer that specialises in office supplies. It is a division of a large retail company. The following date relate to 2015:
Genre Go is a retailer that specialises in office supplies. It is a division of a large retail company. The following date relate to 2015:
Profit $16,000 ,000
Sales Revenue $200,000 ,000
Average invested capital $80 ,000, 000
Required:
a. Calculate Genre Go’s return on sales, investment turnover and return on investment for 2015.
b. Demonstrate two ways in which the manager of Genre Go could improve its ROI, increasing it to 25 per cent.
c. Assume that the retail company has a required rate of return of 10 per cent, and calculate the residual income for Genre Go for 2015
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen and Peter Brewer
14th edition
978-007811100, 78111005, 978-0078111006
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