Question
Helton Corporations balance sheet indicates that the company has $240,000 invested in operating assets. During 2014, Helton earned operating income of $59,000 on $456,000 of
Helton Corporations balance sheet indicates that the company has $240,000 invested in operating assets. During 2014, Helton earned operating income of $59,000 on $456,000 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 your intermediate calculations to two decimal places. Round your 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 $456,000 to $646,000, thereby resulting in an increase in operating income from $59,000 to $78,000. |
(2) | Sales remain constant, but Helton reduces expenses, resulting in an increase in operating income from $59,000 to $66,000. |
(3) | Helton is able to reduce its invested capital from $240,000 to $174,000 without affecting operating income. |
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