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Margin, Turnover Ready Electronics is facing stilf competition from imported goods. Its operating income margin has been declining steadily prices so that t can maintain
Margin, Turnover Ready Electronics is facing stilf competition from imported goods. Its operating income margin has been declining steadily prices so that t can maintain its market share. The operating results for the past 3 years are as follows for the past several years. The company has been forced to lower Year 1 Year ear 3 set120,0950 fa ae enades, Readpresadit plans toastalt ir purchasing and manufacturing system. She estimates that inventories will be reduced by 70% during the first year of ce ar ons prod ng 20% reduct in the average operating assets of the company, which would remain unchanged with ut the JIT system. She also estr ates that sales and o erating ncome will be restored to Year 1 levels because of simultaneous reductions in operating expenses and selling prices. Lower selling prices will allow Ready to expand its market share. (Note: Round all numbers to two decimal places.) Sales 15,000,000 $9,500,000 $9,000,000 Operating income 1,200,000 1,445,000 945,000 assets 15,000,000 15,000,000 15,250,000 Required: Year 1 Year 2 Year 3 Connection: Suppose that in Year 4 the sales and operating income were ac achieved as expected, but remained at the same level as in Year 3Compute the expected ROI, margin, and turnover Margin % Turnover Why did the ROl increase over the Year 3 level? The ROl increased because expenses e RO1, margin, and turnover ROI Margin ( ) % 3level? Turnover
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