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Noriaki's Canning manufactures cans used in a variety of industries. The company split its operations into two divisions: beverages and food products. The information for
Noriaki's Canning manufactures cans used in a variety of industries. The company split its operations into two divisions: beverages and food products. The information for the past year is as follows: Net Sales Operating Income Average Total Assets Beverages $1,350,400 $256,500 $673,600 Food Products $2,203,700 $437,000 $954,100 Noriaki's Canning management has targeted a 32% rate of return. (Round your answers to two decimal places when needed and use rounded answers for all future calculations) 1. Calculate each division's ROI. Division Operating Income / Average Total Assets ROI (%) Beverages 1 Food Products = 2. Calculate each division's profit margin ratio. Operating Income Net Sales = Profit Margin Ratio (%) Division Beverages Food Products 3. Compute each divisions' assets turnover ratio. Net Sales / Average Total Assets - Asset Turnover Ratio Division Beverages Food Products 4. Using the information from Steps 2 & 3, double check your ROI as computed in Step 1. (Note: these values are using rounded answers and therefore the final percent may be slightly different due to rounding errors.) Profit Margin Ratio (%) * Asset Turnover Ratio = ROI (%) Division Beverages Food Products X
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