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Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed a miserable nine months. If it could have gone wrong, it
Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed a miserable nine months. "If it could have gone wrong, it did. Sales are down, income is down, inventories are bloated, and quite frankly, l'm beginning to worry about my job," he moaned. Washburn is evaluated on the basis of ROI. Selected figures for the past nine months follow. In an effort to make something out of nothing and to salvage the current year's performance, Washburn was contemplating implementation of some or all of the following four strategies: a. Write off and discard $108,000 of obsolete inventory. The company will take a loss on the disposal. b. Accelerate the collection of $138,000 of overdue customer accounts receivable. c. Stop advertising through year-end and drastically reduce outlays for repairs and maintenance. These actions are expected to save the division $243,000 of expenses and will conserve cash resources. d. Acquire two competitors that are expected to have the following financial characteristics: CapensesProjectedSalesProjectedOperatingProjectedInvested equired: -a. Define sales margin, capital turnover, and return on investment. -b. Compute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past nine nonths. Complete this question by entering your answers in the tabs below. Compute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past nine months. (Round your "Sales margin" answer to 1 decimal place (i.e., .1234 should be entered as 12.3 ) and round your "Capital turnover" answer to 2 decimal places.)
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