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Munoz Corporation's balance sheet indicates that the company has $600,000 invested in operating assets. During the year, Munoz earned operating income of $72,000 on $1,200,000
Munoz Corporation's balance sheet indicates that the company has $600,000 invested in operating assets. During the year, Munoz earned operating income of $72,000 on $1,200,000 of sales. Required a. Compute Munoz's profit margin for the year. b. Compute Munoz's turnover for the year. c. Compute Munoz's return on investment for the year. d. Recompute Munoz's ROI under each of the following independent assumptions: (1) Sales increase from $1,200,000 to $1,440,000, thereby resulting in an increase in operating income from $72,000 to $80,640. (2) Sales remain constant, but Munoz reduces expenses, resulting in an increase in operating income from $72,000 to $74,400. (3) Munoz is able to reduce its invested capital from $600,000 to $480,000 without affecting operating income. Complete this question by entering your answers in the tabs below. Req A to C Req D Compute Munoz'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).) a. Profit margin % b. Turnover times c. Return on investment %
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