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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

Respuesta :

Answer:

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