Question
Jordan Corporations balance sheet indicates that the company has $590,000 invested in operating assets. During the year, Jordan earned operating income of $69,620 on $1,180,000
Jordan Corporations balance sheet indicates that the company has $590,000 invested in operating assets. During the year, Jordan earned operating income of $69,620 on $1,180,000 of sales. Required Compute Jordans profit margin for the year. Compute Jordans turnover for the year. Compute Jordans return on investment for the year. Recompute Jordans ROI under each of the following independent assumptions: (1) Sales increase from $1,180,000 to $1,416,000, thereby resulting in an increase in operating income from $69,620 to $77,880. (2) Sales remain constant, but Jordan reduces expenses, resulting in an increase in operating income from $69,620 to $71,980. (3) Jordan is able to reduce its invested capital from $590,000 to $472,000 without affecting operating income.
Compute Jordan's profit margin, turnover and return on investment for the year. (Round "Profit margin" and "Return on investment" to 1 decimal place (i.e., 0.234 should be entered as 23.4).) Recompute Jordan's 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 $1,180,000 to $1,416,000, thereby resulting in an increase in operating income from $69,620 to $77,880. (2) Sales remain constant, but Jordan reduces expenses, resulting in an increase in operating income from $69,620 to $71,980. (3) Jordan is able to reduce its invested capital from $590,000 to $472,000 without affecting operating incomeStep by Step Solution
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