Comfortable Carpets manufactures and installs various types of carpets for its c
ID: 2501667 • Letter: C
Question
Comfortable Carpets manufactures and installs various types of carpets for its customers. Comfortable Carpets had sales of $1,200,000 for the year. The company also has net operating income of $300,000, and average operating assets of $1,500,000. Required: A. What is Comfortable Carpets' margin and turnover for the year? Do not round your intermediate calculations. Round margin to the nearest whole percent and turnover to one decimal place.
Margin ____%
Turnover ______ times
B. What is the ROI for the company? _____%
Explanation / Answer
Margin =Net operating income /sales
= 300,000 / 1,200,000
= .25 or 25%
Turnover = Net sales /Average asset
= 1,200,000 / 1,500,000
= .80 times
ROI =Net operating income / Average asset
= 300,000 / 1,500,000
= .20 or 20%