ix 25 Egret Paints is a national paint manufacturer and retailer. The company is segmented into...

Transcribed Image Text:

ix 25 Egret Paints is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint Stores (branded retail locations), Consumer (paint sold through home improvement stores), Automotive (sales to auto manufacturers), International and Administration. The following is selected divisional information for its two largest divisions: Paint Stores and Consumer: Paint Stores Consumer Net Sales Revenue Operating Average Income Total Assets $ 4,000,000 $ 476,000 $1,420,000 1,300,000 196,000 1,585,000 Management has specified a 19% target rate of return. Net Sales Revenue and Operating Income $4,000,000 $2,000,000 Net Sales Revenue Paint Stores Consumer Consumer Paint Stores Operating Income 1. Calculate each division's ROI. Round all of your answers to four decimal places. For example, if your raw answer is .4355, then express the answer as 43.55%. 2. Calculate each division's profit margin ratio. Interpret your results. 3. Calculate each division's asset turnover ratio. Interpret your results. 4. Describe some of the factors that management considers when setting its minimum target rate of return. ix 25 Egret Paints is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint Stores (branded retail locations), Consumer (paint sold through home improvement stores), Automotive (sales to auto manufacturers), International and Administration. The following is selected divisional information for its two largest divisions: Paint Stores and Consumer: Paint Stores Consumer Net Sales Revenue Operating Average Income Total Assets $ 4,000,000 $ 476,000 $1,420,000 1,300,000 196,000 1,585,000 Management has specified a 19% target rate of return. Net Sales Revenue and Operating Income $4,000,000 $2,000,000 Net Sales Revenue Paint Stores Consumer Consumer Paint Stores Operating Income 1. Calculate each division's ROI. Round all of your answers to four decimal places. For example, if your raw answer is .4355, then express the answer as 43.55%. 2. Calculate each division's profit margin ratio. Interpret your results. 3. Calculate each division's asset turnover ratio. Interpret your results. 4. Describe some of the factors that management considers when setting its minimum target rate of return.