Gibson Corporation’s balance sheet indicates that the company has $580,000 invested in operating assets. During the year, Gibson earned operating income of $67,280 on $1,160,000 of sales. RequiredCompute Gibson’s profit margin for the year.Compute Gibson’s turnover for the year.Compute Gibson’s return on investment for the year.Recompute Gibson’s ROI under each of the following independent assumptions:(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting in an increase in operating income from $67,280 to $76,560.(2) Sales remain constant, but Gibson reduces expenses, resulting in an increase in operating income from $67,280 to $69,600.(3) Gibson is able to reduce its invested capital from $580,000 to $464,000 without affecting operating income. Complete this question by entering your answers in the tabs below.Req A to CReq DCompute Gibson's profit margin, turnover and return on investment for the year. (Round "Profit margin" and "Return oninvestment" to 1 decimal place (i.e., 0.234 should be entered as 23.4).)a. Profit marginb. Turnoverc. Return on investment%6times96Req A to CReq D > Complete this question by entering your answers in the tabs below.Req A to CReg DRecompute Gibson'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 $1,160,000 to $1,392,000, thereby resulting in an increase in operating income from $67,280 to$76,560.(2) Sales remain constant, but Gibson reduces expenses, resulting in an increase in operating income from $67,280 to$69,600.(3) Gibson is able to reduce its invested capital from $580,000 to $464,000 without affecting operating income.Return on Investment(2)(3)%69696< Req A to CReg D >Show less

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Answered: Gibson Corporation’s balance sheet…

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

9th Edition

ISBN:9781305635937

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 7DQ: From the Google Finance site, use the DuPont analysis to determine the total assets turnover ratio...

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Question

Gibson Corporation’s balance sheet indicates that the company has $580,000 invested in operating assets. During the year, Gibson earned operating income of $67,280 on $1,160,000 of sales.

Required

Compute Gibson’s profit margin for the year.
Compute Gibson’s turnover for the year.
Compute Gibson’s return on investment for the year.
Recompute Gibson’s ROI under each of the following independent assumptions:
(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting in an increase in operating income from $67,280 to $76,560.
(2) Sales remain constant, but Gibson reduces expenses, resulting in an increase in operating income from $67,280 to $69,600.
(3) Gibson is able to reduce its invested capital from $580,000 to $464,000 without affecting operating income.

Complete this question by entering your answers in the tabs below.
Req A to C
Req D
Compute Gibson'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).)
a. Profit margin
b. Turnover
c. Return on investment
%6
times
96
Req A to C
Req D >

Complete this question by entering your answers in the tabs below.
Req A to C
Reg D
Recompute Gibson'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 $1,160,000 to $1,392,000, thereby resulting in an increase in operating income from $67,280 to
$76,560.
(2) Sales remain constant, but Gibson reduces expenses, resulting in an increase in operating income from $67,280 to
$69,600.
(3) Gibson is able to reduce its invested capital from $580,000 to $464,000 without affecting operating income.
Return on Investment
(2)
(3)
%6
96
96
< Req A to C
Reg D >
Show less

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