Profit Margin, Investment Turnover, and ROI Briggs Company has operating income of $25,854, invested assets of $139,000, and sales of $430,900. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a. Profit margin % b. Investment turnover c. Return on investment

Question

Business

Sergio Roth

30 July, 08:05

Profit Margin, Investment Turnover, and ROI Briggs Company has operating income of $25,854, invested assets of $139,000, and sales of $430,900. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a. Profit margin % b. Investment turnover c. Return on investment

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Answers (1)

Know the Answer?

Payton Stevens · Answer 1

a. 6.00%

b. 3.10 times

c. 18.60%

Explanation:

The computations are given below

As we know that

a. Profit margin is

= Income from operation : Sales * 100

= $25,854 : $430,900

= 6.00%

b. Investment turnover is

= Sales : Invested assets

= $430,900 : $139,000

= 3.10 times

And,

c. Return on investment is

= Profit margin * investment turnover

= 6 * 3.1 times

= 18.60%

Therefore, we use the above formulas