Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 1. Calculate each division's ROI. 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, X.XX%.) Operating income Total assets ROI Paint Stores 519750 . 1750000 30 % Consumer 221000 2600000 9 % 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, X.XX%.) Operating income Sales Sales margin 14 % Paint Stores 519750 3850000 Consumer 221000 1300000 171% Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. B (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Interpret your results. The Consumer Division is more profitable on each dollar of sales. Requirement 3. Calculate each division's capital turnover. Interpret your results. First enter the formula, then calculate the capital turnover for each division. (Round to two decimal places.) Sales Total assets = Capital turnover Paint Stores 3850000 . 1750000 2.2 times Consumer 1300000 2600000 5 times The Paint Stores 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. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. 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, X.XX%.) X ROI Paint Stores % % Consumer % X % The Consumer Division's profitability on each dollar of sales is higher than the Paint Stores Division's profitability. However, the Paint Store Division's efficiency is significantly higher than the Consumer Division's efficiency. These results cause the Paint Stores Division's ROI to be higher than the Consumer Division's ROI. Requirement 5. Calculate each division's RI. Interpret your results and offer recommendations for any division with negative 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 Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 5. Calculate each division's RI. Interpret your results and offer recommendations for any division with negative 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.) X 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 its . 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. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. 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 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 earned over the year. Management must also decide whether they wish to use the gross book value of assets or the net book value of assets. The book value is often used because it is easily pulled from the balance sheet. However, Rol 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. Sunshine Paints is a national paint manufacturer and retailer. B (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. 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. RI does a better job of Requirement 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. E (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 7. Describe some of the factors that management considers when setting its minimum target rate of return. After-tax operating income Assets less current liabilities amount Competitors rate of return General economic conditions Interest rates on the company debt Investors expectations 1 Minimum rate of return required by investors | Risk level of the division's business Return being earned by other divisions than ROI for performance measurement. reports are insufficient for evaluating the performance of investment centers. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement. RI does 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. - X Requirements Sunshine Paints B (Click the ic Assume that ma Data Table Round all calculations to two decimal places. Read the require mcyuITICIILT The company is segmented into five divisions: Paint Stores (branded retail location), Consumer (paint sold through stores such as 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). 1. Calculate each division's ROI. 2. Calculate each division's sales margin. Interpret your results. 3. Calculate each division's capital turnover. 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 recommendations for any division with negative RI. 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. 7. Describe some of the factors that management considers when setting its minimum target rate of return. 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement. 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers. Total Assets Sales Operating Income Paint Stores ... $ 3,850,000 $ 519,750 Consumer. $ 1,300,000 $ 221,000 $ 1,750,000 $ 2,600,000 Requirement 8. RI does a better Print Done Requirement 9. Investment cent Print Done rmance renarts are insufficient because they do not measure Choose from an Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 1. Calculate each division's ROI. 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, X.XX%.) Operating income Total assets ROI Paint Stores 519750 . 1750000 30 % Consumer 221000 2600000 9 % 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, X.XX%.) Operating income Sales Sales margin 14 % Paint Stores 519750 3850000 Consumer 221000 1300000 171% Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. B (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Interpret your results. The Consumer Division is more profitable on each dollar of sales. Requirement 3. Calculate each division's capital turnover. Interpret your results. First enter the formula, then calculate the capital turnover for each division. (Round to two decimal places.) Sales Total assets = Capital turnover Paint Stores 3850000 . 1750000 2.2 times Consumer 1300000 2600000 5 times The Paint Stores 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. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. 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, X.XX%.) X ROI Paint Stores % % Consumer % X % The Consumer Division's profitability on each dollar of sales is higher than the Paint Stores Division's profitability. However, the Paint Store Division's efficiency is significantly higher than the Consumer Division's efficiency. These results cause the Paint Stores Division's ROI to be higher than the Consumer Division's ROI. Requirement 5. Calculate each division's RI. Interpret your results and offer recommendations for any division with negative 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 Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 5. Calculate each division's RI. Interpret your results and offer recommendations for any division with negative 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.) X 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 its . 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. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. 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 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 earned over the year. Management must also decide whether they wish to use the gross book value of assets or the net book value of assets. The book value is often used because it is easily pulled from the balance sheet. However, Rol 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. Sunshine Paints is a national paint manufacturer and retailer. B (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. 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. RI does a better job of Requirement 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. E (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 7. Describe some of the factors that management considers when setting its minimum target rate of return. After-tax operating income Assets less current liabilities amount Competitors rate of return General economic conditions Interest rates on the company debt Investors expectations 1 Minimum rate of return required by investors | Risk level of the division's business Return being earned by other divisions than ROI for performance measurement. reports are insufficient for evaluating the performance of investment centers. Choose from any list or enter any number in the input fields and then continue to the next question. Sunshine Paints is a national paint manufacturer and retailer. (Click the icon to view additional information.) Assume that management has specified a 21% target rate of return. Read the requirements. Requirement 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement. RI does 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. - X Requirements Sunshine Paints B (Click the ic Assume that ma Data Table Round all calculations to two decimal places. Read the require mcyuITICIILT The company is segmented into five divisions: Paint Stores (branded retail location), Consumer (paint sold through stores such as 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). 1. Calculate each division's ROI. 2. Calculate each division's sales margin. Interpret your results. 3. Calculate each division's capital turnover. 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 recommendations for any division with negative RI. 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. 7. Describe some of the factors that management considers when setting its minimum target rate of return. 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement. 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers. Total Assets Sales Operating Income Paint Stores ... $ 3,850,000 $ 519,750 Consumer. $ 1,300,000 $ 221,000 $ 1,750,000 $ 2,600,000 Requirement 8. RI does a better Print Done Requirement 9. Investment cent Print Done rmance renarts are insufficient because they do not measure Choose from an