Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Zooms, 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

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Zooms, 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: B (Click the icon to view the information.) Read the requirements. Requirement 1. Calculate each division's ROI. Round all of your answers to four decimal places. Begin by selecting the formula to calculate return on investment (ROI), and then enter the amounts to calculate each division's ROI. (Enter your answer as a percent rounded to two decimal places, X.XX%) ROI Residential Professional Requirement 2. Calculate each division's profit margin ratio. Interpret your results. Begin by selecting the formula to calculate profit margin ratio, and then enter the amounts to calculate each division's profit margin ratio. (Enter each profit margin ratio as a percent rounded to two decimal places, X.XX%.) = Profit margin ratio Residential Professional V of operating income on each dollar of net sales revenue. The The residential division is earning about $ 7 of operating income on each dollar of net sales revenue whereas the professional division is earning about S higher profit margin ratio helps to account for its higher ROI. Requirement 3. Calculate each division's asset turnover ratio. Interpret your results. (Round your answer to two decimal places, X.XX.) = Asset turnover ratio Residential Professional of net sales revenue for each dollar of average total assets invested. The professional division is generating about V of net sales revenue for every dollar of average total assets. The The residential division is generating about is more efficient. Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? (Enter your answers as a percent rounded to two decimal places, X.XX%.) First, select the expanded ROI formula. x = ROI ROI The ROI for the residential division is Does your answer above agree with the basic ROI for the residential division you calculated in Requirement 1? The ROI for the professional division is % Does your answer above agree with the basic ROI for the professional division you calculated in Requirement 1? Data Table Average Total Assets Residential Net Sales Revenue Operating Income 570,000 $ 61,750 1,110,000 156,000 190,000 390,000 Professional Management has a 25% target rate of return for each division. Print Print Done Done . i Requirements 1. Calculate each division's ROI. Round all of your answers to four decimal places. Calculate each division's profit margin ratio. Interpret your results. Calculate each division's asset turnover ratio. Interpret your results. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? 3. 4. Use th Print Done

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Theory And Practice

Authors: Jerry R. Strawser, Robert H. Strawser, Roger H. Hermanson

9th Edition

0873939336, 9780873939331

More Books

Students also viewed these Accounting questions

Question

Who will receive the final evaluation?

Answered: 1 week ago