Sales margin, capital turnover, ROI, EVA
Not what you're looking for?
See attached file.
Engel's: compute ratios for each division: sales margin, capital turnover, ROI, residual income, EVA
Purchase this Solution
Solution Summary
The solution explains how to calculate sales margin, capital turnover, ROI and EVA for each division
Solution Preview
Problem 1
Asian Division
a. Sales Margin = Operating Income/Sales = 92,000/460,000 = 20%
b. Capital turnover = Sales/Average operating assets = 460,000/368,000=1.25
c. ROI = Margin X Turnover = 20%X1.25 = 25%
d. Residual income = Operating Income - Imputed interest X Average operating assets
= 92,000-24% X 368,000 = $3,680
e. EVA = Operating Income X (1-tax rate) - WACC X Average operating assets
= 92,000 X (1-0.18) - 14% X 368,000 = $23,920
European Division
a. Sales Margin = Operating Income/Sales = 90,000/900,000 = 10%
b. Capital Turnover = Sales/Average operating assets = 900,000/750,000=1.2
c. ROI = Margin X Turnover = 10%X1.2 = 12%
d. Residual ...
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.