Question
Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income Average
Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income Average Invested Assets Electronics $ 40,800,000 $ 3,060,000 $ 17,000,000 Sporting goods 17,680,000 2,210,000 13,000,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?
A food manufacturer reports the following for two of its divisions for a recent year.
($ millions) | Beverage Division | Cheese Division | |||||
Invested assets, beginning | $ | 2,688 | $ | 4,481 | |||
Invested assets, ending | 2,606 | 4,413 | |||||
Sales | 2,694 | 3,938 | |||||
Operating income | 362 | 647 | |||||
1. Compute return on investment. 2. Compute profit margin. 3. Compute investment turnover for the year.
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