Comparative data on three companies in the same service industry are given below: Required: 1. What advantages

Question:

Comparative data on three companies in the same service industry are given below:

Company A B S 500,000 S Sales S600,000 S 84,000 S 70,000 S Net operating income Average operating assets S300,000 1,000,

Required:

1. What advantages are there to breaking down the ROI computation into two separate elements, margin and turnover?

2. Fill in the missing information above, and-comment on the relative performance of the three companies in as much detail as the data permit. Make specific recommendations about how to improve the ROI.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Managerial Accounting

ISBN: 978-0697789938

13th Edition

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

See More Books

Question Posted: Jun 29, 2011 06:59 AM

See More Questions

The following information relates to three companies in the same industry: Required: Explain and calculate the price-earnings and dividend yield ratios. On the basis of only the foregoing...
Two profitable companies in the same industry have similar total stockholders' equity. However, one company has most of its equity balance in common stock, while the other company has most of its...
What advantages are there to this two-level directory?
A three-phase line has an impedance of 1 + j3 per phase. The line feeds a balanced delta-connected load, which absorbs a total complex power of 12 + j5 k VA. If the line voltage at the load end has...
If you obtained one thousand 95% confidence intervals for a population mean, , roughly how many of the intervals would actually contain ?
A 50-kg copper block initially at 140°C is dropped into an insulated tank that contains 90 L of water at 10°C. Determine the final equilibrium temperature and the total entropy change for...
Indianapolis Auto Parts (IAP) has a Seat Manufacturing Department that uses ABC. IAPs activity cost allocation rates include the following: Suppose Ford has asked for a bid on 50,000 built-in baby...
The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of...
10. A skier plans to ski a smooth fixed hemisphere of radius R. He starts form rest on a curved smooth surface of height TR/4 The angle at which he leaves the hemisphere is : (a) cos Yshipma (b) cos...
Suppose the agent has progressed to the point shown in Figure 7.4(a), page 239, having perceived nothing in [1, 1], a breeze in [2, 1], and a stench in [1, 2], and is now concerned with the contents...
I know headquarters wants us to add that new product line, said Dell Havasi, manager of Billings Companys Office Products Division. But I want to see the numbers before I make any move. Our divisions...
There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For...
In management by exception, the supervisor focuses on exceptional deviations from standard, rather than every deviation. Will employees grow lax when they realize they can per-form below standard, so...
The volume of a cylinder is given by $V=\pi r^{2} h$, where $r$ is the radius of the cylinder and $h$ is the height. Assume the radius, in $\mathrm{cm}$, is lognormal with parameters...
Define "discovery." What is its purpose? What are the primary methods of discovery?
Identify five defenses to an annulment action.
True Or False Most Americans who are injured in an accident seek compensation from the individual or entity that caused the accident.
Explain why a party might choose to file a motion on an exparte basis. Give an example.
Selected balance sheet and income statement information for Nordstrom, Inc, a department store retailer, follows. a. Compute its 2013 return on net operating assets (RNOA). b. Disaggregate RNOA into...
The diagram shows the two forces acting on a small object. Which of the following is the resultant force on the object? A. 8 N downwards B. 8 N upwards C. 2 N downwards D. 2 N upwards 3 N 5 N
Explain why solid CO 2 is referred to as dry ice.
In response to how the sales incentives might be contributing to falling profits despite growing sales, Chan Company's controller has produced the following information on last year's sales to two...
Compute the customer lifetime value for Customer 421 based on the data below for the first six years of the customer relationship. Costs (ct) were incurred to promote customer retention to a rate of...
Stan's, a department store chain, has conducted a survey to collect data on customer satisfaction and perception of its merchandise and service. Data for responses to the question "How likely is it...
Jamie Lee is attracted to the low monthly payment advertised for a vehicle lease. She may well be able to afford a more expensive car than she originally thought. Jamie Lee really needs to think this...
Explain virtual hosting and how to use either name-based or IP-based virtual hosting.?
Discuss the role of literary allusion in satire as a means of subverting conventions and critiquing societal norms.

Comparative data on three companies in the same service industry are given below: Required: 1. What advantages

Question:

Sales Net operating income Average operating assets Margin Turnover ROI Company B $ 500,000 $ 70,000 $ ? ? ? 7% A $600,000 $ 84,000 $ $300,000 $ ? ? ? ? ? 1,000,000 3.5% 2 ?

Step by Step Answer:

1 Breaking the ROI computation into two separate elements helps the manager to see important relationships that might remain hidden First the importan...View the full answer

Managerial Accounting

Students also viewed these Managerial Accounting questions