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    Return on Investment

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    I do not understand how to compute the missing numbers.

    © BrainMass Inc. brainmass.com June 4, 2020, 12:08 am ad1c9bdddf


    Solution Summary

    Comparative data on three companies in the same service industry are given in the table below. Study the table and respond to the questions that follow.
    A B C
    Sales $600,000 $500,000 $ ?
    Net operating income $ 84,000 $ 70,000 $ ?
    Average operating assets $ 300,000 $ ? $1,000,000
    Margin ? ? 3.5%
    Turnover ? ? 2
    ROI ? 7% ?
    ? What advantages are there to breaking down the ROI computation into two separate elements: margin and turnover?
    ? Fill in the missing information in the table, and comment on the relative performance of the three companies in as much detail as the data permit. Make specific recommendations about how to improve the ROI.