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Zachary Corporation's balance sheet indicates that the company has $690,000 invested in operating assets. During the year, Zachary earned operating income of $95,220 on $1,380,000
Zachary Corporation's balance sheet indicates that the company has $690,000 invested in operating assets. During the year, Zachary earned operating income of $95,220 on $1,380,000 of sales. Required a. Compute Zachary's profit margin for the year. b. Compute Zachary's turnover for the year. c. Compute Zachary's return on investment for the year. d. Recompute Zachary's ROI under each of the following independent assumptions: (1) Sales increase from $1,380,000 to $1,656,000, thereby resulting in an increase in operating income from $95,220 to $107,640. (2) Sales remain constant, but Zachary reduces expenses, resulting in an increase in operating income from $95,220 to $97,980. (3) Zachary is able to reduce its invested capital from $690,000 to $552,000 without affecting operating income. Compute Zachary's profit margin, turnover and return on investment for the year. (Round "Profit margin" and "Return on investment" to 1 decimal place (i.e., 0.234 should be entered as 23.4).) Recompute Zachary's ROI under each of the following independent assumptions: (Do not round intermediate calculations. Round your answers to 2 decimal places. (i.e., 2345 should be entered as 23.45).) (1) Sales increase from $1,380,000 to $1,656,000, thereby resulting in an increase in operating income from $95,220 to $107,640. (2) Sales remain constant, but Zachary reduces expenses, resulting in an increase in operating income from $95,220 to $97,980. (3) Zachary is able to reduce its invested capital from $690,000 to $552,000 without affecting operating income
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