The following data pertain to Dakota Division's most recent year of operations.

Income $4,250,000

Sales revenue 57,500,000

Average invested capital 12,500,000

Required:

Compute Dakota Division's sales margin, capital turnover, and return on investment for the year.

The Dakota Division's sales margin, capital turnover, and return on investment for the year is 7.40%, 4.60 times and 34% respectively

Explanation:

The computations are shown below:

1. For sales margin:

Margin = Income : Sales * 100

= $4,250,000 : $57,500,000 * 100

= 7.40%

2. For turnover:

Turnover = Sales : Average invested capital

= $57,500,000 : $12,500,000

= 4.60 times

3. For Return on investment:

Return on investment = Income : Average invested capital * 100

= $4,250,000 : $12,500,000 * 100

= 34%