Zoe, a national manufacturer of lawn mowing and snow-blowing equipment, segments its business according to customer type

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Zoe A National Manufacturer Of Lawn Mowing And Snow Blowing Equipment Segments Its Business According To Customer Type 1 (83.66 KiB) Viewed 34 times

Zoe, a national manufacturer of lawn mowing and snow-blowing equipment, segments its business according to customer type: Professional and Residential. Assume the following divisional information was available for the past year (in thousands of dollars): (Click the icon to view the information.) Read the requirements. Requirement 1. Calculate each division's ROI First enter the formula, then calculate each division's ROI using the expanded formula , . Operating income Total assets Residential S 65,720 212,000 Professional S 167,400 + $ 372,000 + ROL 31 % 45 % Interpret your results - X + Sales margin Each division's ROI is very high however, the Professional Division has an even higher Rol than the Residential Division. Requirement 2. Calculate each division's sales margin. Interpret your results. . First enter the formula, then calculate each division's sales margin. Data table Operating income Sales Residential S S 65,720 1,314,400 5% 167400 Operating Income Professional Total Assets Sales 1 % Residential $ 1,314,400 $ 65,720 S 212,000 Professional $ 1,395,000 $ 187.400 S $ 372.000 Requirements Assume that management has a 25% target rate of return for each division. = - X O Print 1. Calculate cach division's ROI. 2. Calculate each division's sales margin. Interpret your results. 3. Calculate each division's capital turnover. Interpret your results, 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? 5. Calculate each division's residual income (RI). Interpret your results. Done