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Alpha Company would like to examine the sales margin and asset turnover components

 
Alpha Company would like to examine the sales margin and asset turnover components of return on investment for three of its divisions and has accordingly prepared the following;
Division                        Investment                      Division OperatingIncome                         Sales
 
E                                       575,000                            75,000                                                                    500,000
 
F                                      700,000                            91,000                                                                    542,000
 
G                                    1,000,000                         176,000                                                                763,000
 
(a) Compute each division's return on investment, sales margin, and asset turnover
 
(b) Comment on the division's relative rankings on the ratios computed in (a).

May 10 2018 View more View Less

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