Please help me answer all of the requirements Chego Paints is a natiMAl paint manufacturer and reta;oer (CJO icon to DdC'bonaI tnformatjon) Assume that manapment
Chego Paints is a natiMAl paint manufacturer and reta;oer (CJO icon to DdC'bonaI tnformatjon) Assume that manapment has specified a 21 % target rate of return Read the Requirement 1. Calwlate each ROI. First enter formula. then calculate the ROI each (Enter the ROI as a percent rounded to the nearest hundredth Of a percentage. XXX% ROI Pant Stores Requirement 2. Cak:ulate each (Evision's sales mygin_ Interpret your results. Enter the formwa. then calculate tie ss margin for each division. (Enter the sates margin as a percent rounded to tho nearest hundredth of a Sales margin Pant Stoms Ccnsumer Interpret your resutts. Division is profitable on each dollar Of sales. Requirement 3. Calculate each capital turrwver Interpret results. First enter the torrnu\a, then calculate the capital turnover tor each divisin (Round to two dedma) places.) Division is more e6dent in generatirg sales '-with its assets. Requirement 4. use me ROI formula to confirm your results Requitement 1- Interpret your results. Fist enter the expanded ROI formula, then calculate the ROI for each &vision. (Enter the ROI as a percent rounded to the nearest hundredth ROI Paint Stores Ccnsumer The cornpany is segmented into five dvisions: Paint Stores (branded retail location). Consumr (paint sdd through stores such as Home Depot and Lowe's), Automotive (sales to auto manUacturers), International. and Administration. The rolbwing is selected hypothetc.al divisional informaton for the company's two largest divisions: Paint Stores and Consumer (in of dollars) Paint Stores Consumer Requirements Sales $ 3,900.000 s 1,200.000 Operating Income Total Assets s s 507,000 180.000 S 1,500.000 s 1.6001000 Round atl calculations to two decimal places. 1. 2. 3. 4. 5. 7. 8. 9. Calculate each division's ROI. Calculate each divisions sales margin. Interpret your resutts, Calculate eau' division's capital turnover. Interpret your results Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. Catcutate each division's RI. Interpret your results and offer recommendabons for any division negabve RI Total asset data were provided in this problem. If you were to gather this information from an annual repotL would measure total assets? Describe your measurement choices and sa of pros and cons of those chotces. Describe some of the factors that management considers when its mwtimurn target rate Of return. Explain why some firms prefer to use RI rather than ROI for performance measurement. Explain Why budget versus actual pedomancc reports are insufficient for evaluating the performa of investment centers. print The Consumer Division's profitability on douar of sales is than the Paint Stores Divison's profitability. However, the Paint Store Division's efficiency is Significantly than the Consumer Division's efficiency. These resutts cause the Paht Stores Divisons ROI to be he Consurner DiviSions ROL Requirement 5. Caicate each dvjsns RI. Interpret your results and crer recrlrnendaons any division With negative RI. Fst enter the fomula, men Calculate RI each dhson. (Enter thc amount in thousands, use parentheses or a minus sign for negative residual incomes.) RI Pant Stores Interpret your results and offer recomrnendauoos for any djvisjon Mth negative RI. meeting managements target ratc of return. The V Should work on improving its V . Improving this may help the diViSion achieve positive residual incmw Requirement e. Total asset data were provided in this problem you were to gather this information from an annus report. how would you measure total assets? Describe your measurement chokes and some of the pros and cons of those ch&ces. Most ccynpanies use asset balance since tie i-jcorne used in the ROI calculation is earned over the year. - Management rnust also decide whether vastl to use the gross book value of assets or the net value of assets. The Y book value is used because itis easiky pulled from the baiancesheet. However, ROI using tbat value will arfic*ajiy rise overtime due to Requirement 7. Deschbo some of the factors that management considers when setting minimum target rate of return.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started