Question 10.2Provide the missing data for the following situations: Red DivisionWhite DivisionGreen DivisionSalesA$10,000,000ENet operating income$240,000$500,000$288,000Total assetsBC$1,600,000Return on investment0.160.10FReturn on sales0.05D0.14

The ratio analysis helps to analyse the financial statements of the business on the basis of various…

Answered: Provide the missing data for the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q7 Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 1,500,000 $ 1,000,000 Operating Income $ 600,000 $ 450,000 Investment $ 4,000,000 $ 2,750,000 If both divisions were presented with an opportunity to invest in a project that is estimated to achieve an ROI of 15%, what will the units likely decide? Multiple Choice Division P will not invest; Division Q will invest. Division P will invest; Division Q will not invest. Neither unit will invest in the projects. Division P will be indifferent; Division Q will not invest. Division P will invest; Division Q will be indifferent.
Q6 Selected data from Box Division's accounting records revealed the following: Sales $ 825,000 Average investment $ 440,000 Net operating income $ 66,000 Minimum rate of return (divisional cost of capital) 14% Box Division's asset turnover (AT) is calculated to be: (Round your answer to three decimal places.) Multiple Choice 4.270. 1.070. 1.875. 12.500. 1.625.
Question 10.1 Sleepy Owl Company allows its divisions to operate as autonomous units. Their results for the current year were as follows: Pillow Blanket Bed Sheet Revenues $2,250,000 $500,000 $4,800,000 Current assets 800,000 152,500 1,435,000 Capital assets 1,000,000 400,000 1,750,000 Current liabilities 350,000 75,000 540,000 Net operating income 220,000 60,000 480,000 After-tax income 143,000 39,000 312,000 Weighted average cost of capital 8.5% 8.5% 8.5% Required: Return on sales Return on investment based on total assets employed Economic value added Residual income based on net operating income
A company has the following information available for three of its divisions. COMPANY INFORMATION FOR THREE DIVISIONS Division M Investment in Assets $ 1,200,000 Division N ? Division O $ 2,500,000 Operating Income Sales Revenue ? $ 160,000 250,000 ? $ 3,200,000 ? Profit Margin Ratio 10.00% ? 6.25% Required Rate of Return 10.00% 12.50% 15.00% Return on Investment 15.00% 20.00% ? What is Division O's sales revenue? $1,666,667. $4,000,000. $2,000,000. $ 375,000.
Q35 Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,483,000 $ 805,000 $ 5,005,000 Operating Income 216,100 59,700 263,800 Investment in assets 625,600 292,500 3,179,600 The return on sales (ROS) for Division Z is: (Round your percentages to one decimal place.) Multiple Choice 7.4%. 8.3%. 5.3%. 14.6%. 20.4%.
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,486,000 $ 830,000 $ 4,503,000 Operating Income 208,700 126,600 286,600 Investment in assets 517,200 493,700 3,788,900 The return on sales (ROS) for Division Y is: Multiple Choice 7.6%. 14.0%. 15.3%. 25.6%. 6.4%.
The following results are available for Division X and Y:Division X Division YProfit before interest and tax P185 000 P172, 000Capital employed P1, 540, 000 P1, 650, 000The cost of capital is 10%.Calculate and comment on the performance of the departments based on:a. Return on capital employed (4 marks)b. Residual incom
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,359,000 $ 875,000 $ 4,762,000 Operating Income 231,200 108,200 233,300 Investment in assets 591,600 764,100 2,628,100 The return on investment (ROI) for Division Y is: Multiple Choice 19.1%. 8.9%. 39.1%. 12.4%. 14.2%.
QUESTION 15 The following financial information is available for Beasties upper and lower divisions. Upper Lower Revenues $850,000 $700,000 Operating Expenses 470,000 460,000 Operating Income $380,000 $240,000 Assets Invested $2,000,000 $1,100,000 What is the ROI for the Upper Division? 21.8% 17.9% 19.0% 24.1%
Supply the missing data in the following table : Division A Division B Division C Sales P 60,000 P 75,000 P 100,000 Operating Income _______ 25,000 _______ Operating Assets 30,000 _______ P 50,000 Return on investment 15 % 10 % 20 % Minimum required rate of return 10 % _______ _______ Residual income ________ P 5,000 0 Show the solutions pls, thank you.
XYZ Company has two divisions, A and B. Information for each division is as follows: Net earnings for division Asset base for division Target rate of return Margin Weighted average cost of capital What is the total sales amount for B? 1. P666,667 2. P800,000 3. P1,300,000 4. P1,200,000 A P 40,000 P100,000 15% 10% 12% B P 260,000 P1,200,000 18% 20% 12%
Consider the following 000’s omitted __ Division A Division B Operating assets P 5,000 P 12,500 Operating Income 1,000 2,250 ROI 20 % 18 % Which is a more successful division in terms of ROI ? Using 16 % as the minimum required of return , compute the residual income for each decision. Which division is more successful under this rate ?

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	Red Division	White Division	Green Division
Sales	A	$10,000,000	E
Net operating income	$240,000	$500,000	$288,000
Total assets	B	C	$1,600,000
Return on investment	0.16	0.10	F
Return on sales	0.05	D	0.14

Provide the missing data for the following situations: Red Division White Division Green Division Sales A $10,000,000 E Net operating income $240,000 $500,000 $288,000 Total assets B C $1,600,000 Return on investment 0.16 0.10 F Return on sales 0.05 D 0.14