Margin, Turnover, Return on Investment Pelak Company had sales of $4,858,000, ex
ID: 2490195 • Letter: M
Question
Margin, Turnover, Return on Investment
Pelak Company had sales of $4,858,000, expenses of $4,525,000, and average operating assets of $4,150,000.
Required:
If required, round your answers to nearest whole value.
1. Compute the operating income = _______$
2. Compute the margin (as a percent) and turnover ratio. If required, round your answers to one decimal place.
3. Compute the ROI as a percent. Use the part 2 final answers in these calculations and round the final answer to two decimal places = ________%
Margin = ________________ % Turnover = _______________Explanation / Answer
1. Operating income = Revenue - operating expense
=$4,858,000-$4,525,000
=$ 333,000
2.margin Ration = Operating income/Revenue*100
=$ 333,000/$4,858,000*100
=7%
Turnover Ratio= Revenue/Average operating assets
=$4,858,000/$4,150,000
=1.17
3.Return on investment = Operating income/Average operating assets*100
=$ 333,000/$4,150,000*100
=8%