Required: 1) Compute the margin, turnover, and return on investment for Creighton Company. 2) What is the advantage of expanding the ROI formula to measure margin and turnover separately?

Problem 1. Creighton Company's balance sheet and income statement are provided below: Creighton Company Balance Sheet December 31, 2012 Assets Cash Accounts receivable Inventory Plant and equipment, net of depreciation Land held for future plant expansion Total Assets Liabilities and Stockholders' Equity Accounts payable Notes payable Capital stock, no par Retained earnings Total Liabilities and stockholders' equity 21,000 24,000 15,000 144,000 36,000 240,000 18,000 30,000 120,000 72,000 240,000 $ $ 159,000 Creighton Company Income Statement For the Year Ended December 31, 2012 Sales Less: Variable costs Manufacturing Selling and administrative Contribution margin Less: Fixed costs Manufacturing Selling and administrative Operating income 31,000 25,000 103,000 $ 31,000 22,500 49,500