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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 | $ | 40,000,000 | $ | 2,880,000 | $ | 16,000,000 | |||
Sporting goods | 20,000,000 | 2,040,000 | 12,000,000 | ||||||
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?
Compute profit margin for each department. Which department generates the most net income per dollar of sales? Profit Margin I Choose Denominator: Choose Numerator: = Profit Margin Profit Margin Investment Center Electronics Sporting Goods Which department generates the most net income per dollar of sales? Compute investment turnover for each department. Which department is most efficient at generating sales from average invested assets? Investment Turnover I Choose Denominator: Choose Numerator: = Investment Turnover Investment Center Investment Turnover Electronics Sporting Goods Which department is most efficient at generating sales from average invested assetsStep by Step Solution
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