Zims, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year:

The entries are as follows.

Management has a 26% target rate of return for each division.

Requirements

1. Calculate each divisions ROI. Round all of your answers to four decimal places.

2. Calculate each divisions profit margin ratio. Interpret your results.

3. Calculate each divisions asset turnover ratio. Interpret your results.

4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude?