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Techno Solutions has multiple units. The following financial statements apply to the unit named Lambda Unit. Lambda Unit Income Statement for the Year Ended June
Techno Solutions has multiple units. The following financial statements apply to the unit named "Lambda Unit."
Lambda Unit Income Statement for the Year Ended June 30, Year 10:
- Sales Revenue: $260,000
- Cost of Goods Sold: $160,000
- Gross Margin: $100,000
- Operating Expenses: $40,000
- Depreciation Expense: $20,000
- Operating Income: $40,000
- Nonoperating Income: $15,000
- Loss on Sale of Equipment: $5,000
- Net Income: $50,000
Lambda Unit Balance Sheet as of June 30, Year 10:
- Cash: $30,000
- Accounts Receivable: $50,000
- Inventory: $60,000
- Equipment (less accumulated depreciation): $90,000
- Total Assets: $230,000
- Accounts Payable: $25,000
- Notes Payable: $35,000
- Stockholders' Equity: $170,000
Required:
- Calculate the ROI for Lambda Unit.
- Techno Solutions aims for an ROI of 16%. Lambda Unit has an investment opportunity of $100,000 at an ROI of 18%. Calculate the new ROI if the investment is made.
- Determine the net profit margin for Lambda Unit.
- Compute the asset turnover ratio for Lambda Unit.
- Assess if Lambda Unit achieved the company’s desired ROI after the new investment.
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