Qu12. CHaptér 24 Quiz Submit Quiz This Question: 1 pt 4 of 6 (0 complete) This Q
ID: 2556658 • Letter: Q
Question
Qu12. CHaptér 24 Quiz Submit Quiz This Question: 1 pt 4 of 6 (0 complete) This Quiz: 6 pts possible Zolums, a national manufacturer of lawn-mowing and snow-blowing equipment segments ts business according to customer type p following divisional information was available for the past year ofessional and residential The (Click the icon to view the information ) Read the requirements Requirement 1. Calculate each division's ROl Round all of your answers to four decimal places Begin by selecting the formula to calculate rounded to two decimal places, x xx%) retun on investment (ROI), and then enter the amounts to calculate each division's ROI. (ROI), and then (Enter your answer as a percent ROI Residential Professional Requirement 2. Calculate each division's profit margin ratio Interpret your results Begin by selecting the formula to calculate profit margin ratio, and then enter the amounts to calculate each division's profit margin ratio (Enter each profit margin rato as a percent rounded to two decimal places. x xx% ) Profit margin ratio Residential Professional The residential division is earning about S ? of operating income on each dollar of net sales revenue whereas the protessonal of operating income on each dollar of net sales revenue. The Choose from any list or enter any number in the input fields and then continue to the next question. son s earn g abut S ? hiaher profit marain ratio helos to account for ids hiaher ROI 0Explanation / Answer
The residential divison is earning $ 0.11 on operating income on each dollar of net sales revenue whereas the professional divison is earning $ 0.15 on each dollar of net sales revenue. The professional divison's higher profit margin ratio helps to account for higher ROI.
The residential divison is generating $ 3.06 of net sales revue on each dollar of average total assets invested whereas the professional divison is generating $ 2.73 of net sales revue on each dollar of average total assets invested. The residential division is more efficient.
1 Return on equity= Operating Income/ Average Total Assets Residential Return on equity = 61,380/1,86,000 33% Professional Return on equity = 1,64,340/3,96,000 42% 2 Profit Margin Ratio= Operating Income/ Net Sales Revenue Residential Profit Margin Ratio = 61,380/5,70,000 11% Professional Profit Margin Ratio = 1,64,340/3,96,000 15%