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[ The following information applies to the questions displayed below. ] Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed
The following information applies to the questions displayed below.
Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed a miserable nine
months. If it could have gone wrong, it did. Sales are down, income is down, inventories are bloated, and quite frankly, lm
beginning to worry about my job," he moaned. Washburn is evaluated on the basis of ROI. Selected figures for the past
nine months follow.
In an effort to make something out of nothing and to salvage the current year's performance, Washburn was
contemplating implementation of some or all of the following four strategies:
a Write off and discard $ of obsolete inventory. The company will take a loss on the disposal.
b Accelerate the collection of $ of overdue customer accounts receivable.
c Stop advertising through yearend and drastically reduce outlays for repairs and maintenance. These actions are
expected to save the division $ of expenses and will conserve cash resources.
d Acquire two competitors that are expected to have the following financial characteristics:
Problem Part
Required:
a Define sales margin, capital turnover, and return on investment.
b Compute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past nine
months.
Complete this question by entering your answers in the tabs below.
Req B
Compute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past
nine months. Round your "Sales margin" answer to decimal place ie should be entered as and round your
"Capital turnover" answer to decimal places.
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