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Sagot :
The computations of the return on sales, asset turnover, and return on investments are as follows:
a) Return on Sales = Operating Income/Sales x 100
North Atlantic = 2.77% ($65,000/$2,350,000 x 100)
Mid Atlantic = 2.76% ($40,000/$1,450,000 x 100)
South Atlantic = 6% ($30,000/$500,000 x 100)
b1. Asset/Turnover = Sales/Average Asset
Net Book Gross Book Replacement Liquidation
North Atlantic 9.4% 5.22% 2.37% 6.71%
Mid Atlantic 5% 4.68% 3.82% 3.26%
South Atlantic 5% 2.78% 0.77% 0.51%
b2. ROI (%): = Operating Income/Asset Value
Net Book Gross Book Replacement Liquidation
North Atlantic 26% 14.44% 6.57% 18.57%
Mid Atlantic 14% 12.90% 10.53% 8.99%
South Atlantic 30 % 16.67% 4.62% 3.06%
Data and Calculations:
Region Sales Net Book Gross Book Replacement Liquidation
Value Value Cost Value
North Atlantic $2,350,000 $250,000 $450,000 $990,000 $350,000
Mid Atlantic 1,450,000 290,000 310,000 380,000 445,000
South Atlantic 500,000 100,000 180,000 650,000 980,000
Region Operating Net Book Gross Book Replacement Liquidation
Income Value Value Cost Value
North Atlantic $65,000 $250,000 $450,000 $990,000 $350,000
Mid Atlantic 40,000 290,000 310,000 380,000 445,000
South Atlantic 30,000 100,000 180,000 650,000 980,000
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