Question
[The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have
[The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year:
Sales $ 870,000 Net operating income $ 27,840 Average operating assets $ 100,000
Required: 1. Compute the Springfield clubs return on investment (ROI). (Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%.))
Margin _____?___
Turnover_____?__
ROI ______?_____
Assume that the manager of the club is able to increase sales by $87,000 and that, as a result, net operating income increases by $7,569. Further assume that this is possible without any increase in operating assets. What would be the clubs return on investment (ROI)? (Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%.))
Margin_____?___
Turnover___?___
ROI_____?____
Assume that the manager of the club is able to reduce expenses by $3,480 without any change in sales or operating assets. What would be the clubs return on investment (ROI)? (Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%.))
Margin___?
Tunrover__?
ROI____?
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