Requirement 1. Calculate each division's ROI. Round all of your answers to four decimal places. Begin by selecting the formula to calculate return on investment (ROI), and then enter the amounts to calculate each division's ROI. (Round your calculations to four decimal places and enter your answer as a percent rounded to two decimal places, X.XX%) ROI Paint Stores % Consumer 11 % Requirement 2. Calculate each division's profit margin ratio. Interpret your results. Begin by selecting the formula to calculate profit margin ratio, and then enter the amounts to calculate each division's profit margin ratio. (Enter each profit margin ratio as a percent rounded to two decimal places, X.XX%.) Begin by selecting the formula to calculate profit margin ratio, and then enter the amounts to calculate each division's profit margin ratio. (Enter each profit margin ratio as a percent rounded to two decimal places, X.XX%.) 11 Profit margin ratio Paint Stores % Consumer % The division is more profitable on each dollar of sales. Requirement 3. Calculate each division's asset turnover ratio. Interpret your results. Begin by selecting the formula to calculate asset turnover ratio, and then enter the amounts to calculate each division's asset turnover ratio. (Round your answers to four decimal places, X.XXXX.) Requirement 3. Calculate each division's asset turnover ratio. Interpret your results. Begin by selecting the formula to calculate asset turnover ratio, and then enter the amounts to calculate each division's asset turnover ratio. (Round your answers to four decimal places, X.XXXX.) = Asset turnover ratio Paint Stores 1 Consumer The division is more efficient in generating sales with its average total assets. Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. First, select the expanded ROI formula. ROI Now calculate ROI for each division using the expanded ROI formula. (Enter your answers as a percent rounded to two decimal places, X.XX%.) Using the expanded formula, the ROI for the Paint Stores division is %. Using the expanded formula, the ROI for the Consumer division is %. The Consumer division's profitability on each dollar of net sales revenue is than the Paint Stores division's profitability. However, the Paint Stores division's efficiency is significantly V than the Consumer division's efficiency. These results cause the Paint Stores division's ROI to be the Consumer division's ROI Requirement 5. Calculate each division's RI. Interpret your results, and offer a recommendation for any division with negative RI. First, select the formula to calculate residual income (RI). RI Now calculate each division's RI. (Use a minus sign or parentheses to enter negative residual income.) The Rl for the Paint Stores division is The Rl for the Consumer division is meeting management's target rate of return. A division with a negative RI should consider Requirement 6. Describe some of the factors that management considers when setting its minimum target rate of return. Management different minimum target rates for different divisions. For example, management a division operating in a riskier business environment. Management will need to decide it should be net of V require a higher target rate of return from V for the calculations and whether Choose from any list or enter any number in the input fields and then continue to the next question. i Requirements - X hent has specified a 20% target rate of return Data Table 1. Calculate each division's ROI. Round all of your answers to four decimal places 2. Calculate each division's profit margin ratio. Interpret your results. 3. Calculate each division's asset turnover ratio. Interpret your results. 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. 5. Calculate each division's RI. Interpret your results, and offer a recommendation for any division with negative RI. 6. Describe some of the factors that management considers when setting its minimum target rate of return. Net Sales Operating Average Total Revenue Income Assets $ 3.990,000 $ 480,000 $ 1,395,000 1.295,000 185,000 1,580,000 Paint Stores Consumer Print Done Print Done t
