Question
Problem 15-22A (Algo) Return on investment LO 15-6 Stuart Corporations balance sheet indicates that the company has $650,000 invested in operating assets. During the year,
Problem 15-22A (Algo) Return on investment LO 15-6 Stuart Corporations balance sheet indicates that the company has $650,000 invested in operating assets. During the year, Stuart earned operating income of $84,500 on $1,300,000 of sales. Required Compute Stuarts profit margin for the year. Compute Stuarts turnover for the year. Compute Stuarts return on investment for the year. Recompute Stuarts ROI under each of the following independent assumptions: (1) Sales increase from $1,300,000 to $1,560,000, thereby resulting in an increase in operating income from $84,500 to $95,160. (2) Sales remain constant, but Stuart reduces expenses, resulting in an increase in operating income from $84,500 to $87,100. (3) Stuart is able to reduce its invested capital from $650,000 to $520,000 without affecting operating income.
Problem 15-22A (Algo) Return on investment LO 15-6 Stuart Corporation's balance sheet indicates that the company has $650,000 invested in operating assets. During the year, Stuart earned operating income of $84,500 on $1,300,000 of sales. Required a. Compute Stuart's profit margin for the year. b. Compute Stuart's turnover for the year. c. Compute Stuart's return on investment for the year. d. Recompute Stuart's ROI under each of the following independent assumptions: (1) Sales increase from $1,300,000 to $1,560,000, thereby resulting in an increase in operating income from $84,500 to $95,160. (2) Sales remain constant, but Stuart reduces expenses, resulting in an increase in operating income from $84,500 to $87,100. (3) Stuart is able to reduce its invested capital from $650,000 to $520,000 without affecting operating income. Complete this question by entering your answers in the tabs below. Req A to C ReqD Compute Stuart'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 C. Return on investment times % Complete this question by entering your answers in the tabs below. Req A to C Reg D Recompute Stuart's ROI under each of the following independent assumptions: (Do not round intermediate calculations. Round your answers to 2 decimal places. i.e., .2345 should be entered as 23.45).) (1) Sales increase from $1,300,000 to $1,560,000, thereby resulting in an increase in operating income from $84,500 to $95,160. (2) Sales remain constant, but Stuart reduces expenses, resulting in an increase in operating income from $84,500 to $87,100. (3) Stuart is able to reduce its invested capital from $650,000 to $520,000 without affecting operating income. Show less Return on Investment (1) % (2) % (3) %Step by Step Solution
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