Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 Dynamite limited is a private company where a financial performance evaluation is to take place. The management accounting department advised the management to

image text in transcribed
Question 1 Dynamite limited is a private company where a financial performance evaluation is to take place. The management accounting department advised the management to use Return on Investment to carry out the exercise. Table below provides the data for 2020 that could be used for the analysis Data items $ Cash 24.500 Supplies 1,870 Account receivable 28 560 Prepaid Expense 8.500 Inventory 15.800 Plant 120,000 Property 260,000 Equipment 95.000 Accumulated Depreciation 25,000 Equipment Accumulated Depreciation - Property 7900 Uncamned Revenue 45.000 Sales 145,000 Cost of goods sold 38.500 Operating expenses s Salary expenses 25 800 Supplies Expense 8.400 Utilities expense 12.000 Depreciation Expense 11.300 Rent expense 9.100 Interest Expenses 16.200 Operating Assets for year 2019 330,000 The company is taxed at 18% Show all your calculations REQUIRED 1. Calculate the operating profit (EBIT) for 2020 2. Calculate net income of the current year. 3. Calculate the Average Operating Assets 4. Calculate the ROI using the information on the table 5. Find ROI using the two component method (DuPont Analysis) 6. Explain why the two component method of calculating ROI is more useful 7. What component has contributed the most in 2020 to the ROI of this company 8. What are the major weaknesses of ROI

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Interactive Learning Approach

Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt

6th edition

133852105, 978-0133852103

More Books

Students also viewed these Accounting questions

Question

Have you laid out a timeframe for refreshing the data regularly?

Answered: 1 week ago

Question

Have you laid out the information as clearly as possible?

Answered: 1 week ago

Question

Have you tested your findings with those closest to the market?

Answered: 1 week ago