Requirement 1. Calculate the company'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 the company's ROI. (Round your calculations to four decimal places and enter your final to the nearest hundredth of a percent, X.XX%)

	/		=	ROI
	/		=		%

Requirement 2. Calculate the company's profit margin ratio. Interpret your results.

Begin by selecting the formula to calculate profit margin ratio, and then enter the amounts to calculate the company's profit margin ratio. (Enter your final to the nearest hundredth of a percent, X.XX%)

	/		=	Profit margin ratio
	/		=		%

The company's profit margin ratio tells us that they earn $			of		for every dollar of
	.

Requirement 3. Calculate the company's asset turnover ratio. Interpret your results.

Begin by selecting the formula to calculate asset turnover ratio, and then enter the amounts to calculate the company's asset turnover ratio.

	/		=	Asset turnover ratio
	/		=

The company's asset turnover ratio explains how efficiently a company uses its					to generate
	. The company is generating $		of		with every $1.00 of
	.

Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.

First, select the expanded ROI formula.

x

=

ROI

Using the expanded formula, the ROI for Safe Money, Inc. is

%.

To determine what is driving a company's ROI, management often restates the ROI equation in its expanded form. The ROI calculated with the expanded formula

agrees

does not agree

with the ROI calculated in Requirement 1.

Requirement 5. Calculate the company's RI. Interpret your results.

First, select the formula to calculate residual income (RI).

(

x

)

=

RI

The RI for Safe Money, Inc. is $

.

Safe Money comma Inc.Safe Money, Inc.

is

exceeding

not meeting

management's target rate of return.

Choose from any list or enter any number in the input fields and then continue to the next question.

Safe Money, Inc.

Comparative Balance Sheet

As of December 31, 2018 and 2017

2018

2017

Assets

Cash

$69,000

$57,000

Accounts Receivable

54,200

22,800

Supplies

5,800

5,200

Property, Plant, and Equipment, net

312,000

215,000

Patents, net

145,000

114,000

Total Assets

$586,000

$414,000

Liabilities and Stockholders' Equity

Accounts Payable

$22,000

$24,000

Short-term Notes Payable

141,000

47,000

Long-term Notes Payable

189,000

119,500

Common Stock, no Par

217,000

217,000

Retained Earnings

17,000

6,500

Total Liabilities and Stockholders' Equity

$586,000

$414,000

Safe Money, Inc.

Income Statement

For the Year Ended December 31, 2018

Net Sales Revenue

$4,500,000

Cost of Goods Sold

2,300,000

Gross Profit

2,200,000

Operating Expenses

1,750,000

Operating Income

450,000

Other Income and (Expenses):

Interest Expense

(41,000)

Income Before Income Tax Expense

409,000

Income Tax Expense

143,150

Net Income

$265,8