Question
You manage a division with similar restaurants (X, Y and Z) located in similar locations in similar cities. You evaluate all three of them based
You manage a division with similar restaurants (X, Y and Z) located in similar locations in similar cities. You evaluate all three of them based on Return on Sales, Asset turnover and Return on Investment. The results of the most recent year:
X Y Z
Sales $1,500,000 $750,000 $3,750,000
Income $150,000 $75,000 $18,750
Assets (Investment) $600,000 $7,500,000 $2,500,000
All three parameters (Return on Sales, Asset turnover and ROI) are equally weighted. Calculate these three parameters for each restaurant. You have $10,000 to distribute to the three restaurant managers based on their results. Justify your distribution of this $10,000.
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