• Pull in one of your key calculations from this assignment. Why is this calculation important to understand? How can a company use it in future years to assist in strategic planning?
• Choose another key calculation from the assignment. Why is this calculation important to understand? How can a company use it in future years to assist in strategic planning?

Operating Income = Gross Profit - Total Expenses Operating Income % = Operating Income / Sales Return on Investment = Operating Income / Total Assets Residual Income = Operating Income - (Total Assets * Cost of capital) Detailed explanation:

Operating Income (current year) = $11,812 - $10,125 Operating Income (current year) =$1,687 Operating Income % (current year) = $1,687 / $33,750 Operating Income % (current year) =5.00% Return on Investment (current year) = $1,687 / $4,500 Return on Investment (current year) =37.49% Residual Income (current year) = $1,687 - ( $4,500 * 8% ) Residual Income (current year) = $1,687 - $360 Residual Income (current year) =$1,327 Operating Income (prior year) = $7,920 - $6,963 Operating Income (prior year) =$957 Operating Income % (prior year) = $957 / $24,750 Operating Income % (prior year) =3.87% Return on Investment (prior year) = $957 / $1,500 Return on Investment (prior year) =63.80% Residual Income (prior year) = $957 - ( $1,500 * 8% ) Residual Income (prior year) = $957 - $120 Residual Income (prior year) =$837