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2 April, 23:01

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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  1. 2 April, 23:54
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    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
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