Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Test Sports Company makessnowboards, downhillskis, cross-countryskis, skateboards,surfboards, andin-line skates. The company has found it beneficial to split operations into two divisions based on the climate

Test Sports Company makessnowboards, downhillskis, cross-countryskis, skateboards,surfboards, andin-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for thesport: Snow Sports andNon-Snow Sports. The following divisional information is available for the pastyear:

*Both drop down options are were the reason or were not the reason*

image text in transcribed
Test Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surlboards, and in-Iine skates. The company has found it benecial to split operalions into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: a (Click the icon to view the information) Read the muirements. 1. Compute each division's sales margin. Interpret your results. (Enter the sales margin as a percent rounded to the nearest whole percent.) The Snow Sports division's sales margin is The Non-Snow Sports division's sales margin is Interpret your results. Based on the divisions' sales margins. we know that the sales margins %. %. V the divisions had different ROl's. 2. Compute each division's capital turnover (round to two decimal places). Interpret your results. The Snow Sports division's capital turnover is The Non-Snow Sports division's capital turnover is Interpret your results. Based on the divisions' capital turnover rates, we know that the rates times. times. V the divisions had different ROI's. 0 Data Table - Sales Operatlng Income Total Assets Current Llabllltles Snow Sports $ 5,400,000 $ 1,026,000 $ 4,300,000 $ 350,000 Non-Snow Sports $ 8,600,000 $ 1,634,000 $ 6,400,000 $ 600,000 Test's management has specied a target 17% rate of return. Print Done 3. Use your answers to Question 2 along with your answers to Question 1 to recalculate ROI using the expanded formula. Do your answers agree to the ROI calculations using the original formula and presented in the divisional information? (Enter the ROI as a percentage rounded to the nearest tenth of a percent, X.X%.) The Snow Sports division's ROI using the expanded formula is The Non-Snow Sports division's ROI using the expanded formula is %. %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting, The Financial Chapters

Authors: Tracie Miller Nobles

12th Edition

013449041X, 9780134490410

More Books

Students also viewed these Accounting questions

Question

Use the guidelines of Section 4.5 to sketch the curve. y : 1 2 .

Answered: 1 week ago

Question

7. One or other combination of 16.

Answered: 1 week ago

Question

5. It is the needs of the individual that are important.

Answered: 1 week ago