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Horizon Foods Inc. is a diversified food products company with three operating divisions organized as investment centers. Condensed data taken from the records of the
Horizon Foods Inc. is a diversified food products company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June Y are as follows:The management of Horizon Foods Inc. is evaluating each division as a basis for planning a future expansion of operations.
Required:
Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges,
Horizon Foods Inc.
Divisional Income Statements
For the Year Ended June Y
Using the DuPont formula, compute the profit margin, investment turnover, and return on investment for each division.
Round to one decimal place.
Note: Round any amounts to the nearest cent.
Per dollar of invested assets, the
Division is the most profitable of the three divisions. Assuming that the returns on investment do not change in the future, an expansion of this division will return $
cents on each dollar of invested assets. Thus, when faced with limited funds for expansion, management should
consider the division identified above. Please write out equations and process so I can better learn how to do this myself. Thank you!!
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