P11.49A (LO 4. 5) Return on investment is often expressed as follows: ROI Controllable margin Average operating assets Instructions a. Explain the advantages of breaking down the ROI calculation into two separate components. a. $20,000,000 h. 24% b. Controllable margin Sales Sales Net operating income Average operating assets. Profit margin Asset turnover Return on investment. Residual income Sales Average operating assets 1. Comparative data on three companies operating in the same industry follow. The minimum required ROI is 10% for all three companies. Determine the missing amounts. Company A Company B Company C (a) (b) $5,000,000 0.5% $1,500,000 $180,000 $750,000 $150,000 (c) (e) (2) 2% (k) $750,000 (d) (0) (h) (0) 2. Compare and contrast the performance of the three companies, with reference to their relative performance as measured by ROI and residual income. D 4 (0) (b)

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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11P11.49A (LO 4. 5) Return on investment is often expressed as follows:
ROI=
Controllable margin
Average operating assets
Instructions
a. Explain the advantages of breaking down the ROI calculation into two separate components.
a. $20,000,000
h. 24%
b.
Controllable margin
Sales
Sales
Net operating income
Average operating assets
Profit margin
Asset turnover
Return on investment
Residual income
1. Comparative data on three companies operating in the same industry follow. The minimum required ROI is 10% for all three companies. Determine the missing amants.
Company C
Company A
$1,500,000
Company B
$750,000
(a)
(b)
$180,000
$5.000.000
0.5%
Sales
Average operating assets
$750,000
(d)
(1)
(h)
$150,000
(c)
(e)
(2)
2%
4
(0)
(b)
D
(0)
2. Compare and contrast the performance of the three companies, with reference to their relative performance as measured by ROI and residual income.
Transcribed Image Text:11P11.49A (LO 4. 5) Return on investment is often expressed as follows: ROI= Controllable margin Average operating assets Instructions a. Explain the advantages of breaking down the ROI calculation into two separate components. a. $20,000,000 h. 24% b. Controllable margin Sales Sales Net operating income Average operating assets Profit margin Asset turnover Return on investment Residual income 1. Comparative data on three companies operating in the same industry follow. The minimum required ROI is 10% for all three companies. Determine the missing amants. Company C Company A $1,500,000 Company B $750,000 (a) (b) $180,000 $5.000.000 0.5% Sales Average operating assets $750,000 (d) (1) (h) $150,000 (c) (e) (2) 2% 4 (0) (b) D (0) 2. Compare and contrast the performance of the three companies, with reference to their relative performance as measured by ROI and residual income.
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