Splash Paints is a national paint manufacturer and retailer Click the icon to view additional information) Assume that management has specified a 22% target rate of return Read the requirements Requirement 1. Calculate each division's ROL First enter the formula, then calculate the ROI for each division (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, XXX%) ROI Paint Stores Consumer Requirement 2. Calculate each division's sales margin. Interpret your results Enter the formula, then calculate the sales margin for each division (Enter the sales margin as a percent rounded to the nearest hundredth of a percentage XXX%) Sales margin Paint Stores Consumer Interpret your results The Division is more profitable on each dollar of sales Requirement 3. Calculate each division's capital tumover. Interpret your results First enter the formula, then calculate the capital tumover for each division (Round to two decimal places) Choose from any list or enter any number in the input fields and then continue to the next question. Splash Paints is a national paint manufacturer and retailer (Click the icon to view additional information) Assume that management has specified a 22% target rate of retum. Read the requirements Requirement 3. Calculate each division's capital turnover. Interpret your results. First enter the formula, then calculate the capital tumover for each division (Round to two decimal places) Capital tumover Paint Stores times - Consumer times The Division is more efficient in generating sales with its assets Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results First enter the expanded ROI formula, then calculate the ROI for each division (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, XXX%) ROI Paint Stores % Consumer % X X than the Consumer Divi The Consumer Division's profitability on each dollar of sales is than the Paint Stores Division's profitability. However, the Paint Store Division's efficiency is significantly officiency. 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 recommendations for any division with negative RI Choose from any list or enter any number in the input fields and then continue to the next question. Splash Pain is a national paint manufacturer and retailer Click the icon to view additional Wormation) Assume that management has specified a 22% target rate of retum Read the requirements Requirement 4. Use the expanded ROI fomula to confirm your results from Requirement 1. Interpret your needs. First enter the expanded ROI formula, then calculate the ROI for each division (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, X.XX%) ROL Paint Stores Consumer than the Consumer Division's The Consumer Division's profitability on each dollar of sales is than the Paint Stores Division's profitability. However, the Paint Store Division's officiency is significantly officiency. These results cause the Paint Stores Division's ROI to be the Consumer Division's ROI Requirements. Calculate each division's R. Interpret your results and offer recommendations for any division with negative RI First ever the formula, then calculate the RI for each division (Enter the amount in thousands Use parentheses or a minus sign for negative residual incomes) RI Paint Stores x Consumer Interpret your results and offer recommendations for any division with negative meeting management's target rate of rebum. The should work on improving its Improving this may help the division achieve positive residual Choose from any list or enter any number in the input fields and then continue to the next question Click the icon to view additional information) Assume that management has specified a 22% target rate of return Read the requirements Requirement 5. Calculate each division's Ri. Interpret your results and offer recommendations for any division with newlive RI First enter the formula, then calculate the RI for each division (Enter the amount in thousands Use parentheses or a minus sign for negative residual incomes.) RI Paint Stores Consumer %) Interpret your results and offer recommendations for any division with negative RI meeting management's target rate of return. The should work on improving to Improving this may help the division achieve positive residual Income Requirement 6. Total asset data were provided in this problem. If you were to gather this information from an annual report, how would you measure total assets? Describe your measurement choices and some of the pros and cons of those choices Most companies use the asset balance since the income used in the ROI calculation is eamed over the year. Management must also decide whether they wish to use the gross book value of assets or the netbook value of assets. The book value is often used because it is easily pulled from the balance sheet. However, Rol using that value wil artificially rise over time due to Requirement 7. Describe some of the factors that management considers when setting its minimum target rate of retum and then continue to the next question Splash Paints is a national paint manufacturer and retailer Click the icon to view additional Wormation) Assume that management has specified a 22% target rate of retum Read the requirements Requirement 6. Total asset data were provided in this problem. If you were to gather this information from an annual report, how would you measure totes? Descrbe your measurement choices and some of the pros and cons of those choices Most companies use the asset balance since the income used in the ROI calculation is earned over the year Management must also decide whether they wish to use the gross book value of assets or the netbook value of assets The book value is often used because it is easily pulled from the balance sheet. However, Rol using the value wil artificially rise over time due to Requirement 7. Describe some of the factors that management considers when wetting its minimum retraite of return Requirement 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement Ridoes a better job of Barmant a niwe martesanathanmantra Choose from any list or enter any number in the input fields and then continue to the next question Assume that management has specified a 22% target rate of retum Read the requirements Management must also decide whether they wish to use the gross book value of assets or the netbook value of assets The book value is often used because it is easily puled from the balance sheet. However, ROI using that value will artificially rise over time due to Requirement 7. Describe some of the factors that management considers when setting its minimum target rate of return Requirement 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement Ridoes a better job of Requirement 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers Investment centers are responsible for Budget versus actual performance reports are insufficient because they do not measure Choose from any list or enter any number in the input fields and then continue to the next question acturer and retailer ormation.) a 22% target rate of return. they wish to use the gross bod 0 Data Table ecause it is easily pulled from factors that management consi The company is segmented into five divisions: Paint Stores (branded retail location), Consumer (paint sold through stores such as Sears, Home Depot, and Lowe's)Automotive (sales to auto manufacturers). International, and Administration. The following is selected hypothetical divisional information for the company's two largest divisions: Paint Stores and Consumer (in thousands of dollars). Sales Operating Income Total Assets Paint Stores ... $ 3,950,000 $ 553,000 $ 1,975,000 Consumer $ 1,400,000 $ 231,000 $ 2,000,000 ms prefer to use Rl rather than Print Done ersus actual performance repor Budget versus actual performance reports are insufficient because the
