Question
Helton Corporations balance sheet indicates that the company has $210,000 invested in operating assets. During 2014, Helton earned operating income of $51,000 on $483,000 of
Helton Corporations balance sheet indicates that the company has $210,000 invested in operating assets. During 2014, Helton earned operating income of $51,000 on $483,000 of sales. |
Required |
a. | Compute Heltons profit margin for 2014. (Round your answer to 2 decimal places. (i.e., .2345 should be entered as 23.45).) |
b. | Compute Heltons turnover for 2014. (Round your answer to 2 decimal places.) |
c. | Compute Heltons return on investment for 2014. (Round intermediate calculations and final answer to 2 decimal places. (i.e., .2345 should be entered as 23.45).) |
d. | Recompute Heltons ROI under each of the following independent assumptions. (Do not round intermediate calculations. Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).) |
(1) | Sales increase from $483,000 to $653,000, thereby resulting in an increase in operating income from $51,000 to $68,000. |
(2) | Sales remain constant, but Helton reduces expenses, resulting in an increase in operating income from $51,000 to $57,000. |
(3) | Helton is able to reduce its invested capital from $210,000 to $150,000 without affecting operating income. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started