Margin & Investment Turnover Calculation
Minden Manufacturing Company is evaluating the results of two divisions:
| Eastern | Western | |
|---|---|---|
| Division | Division | |
| Sales | 40,000,000 | 72,000,000 |
| Operating income | 4,000,000 | 6,480,000 |
| Total Assets | 20,000,000 | 18,000,000 |
Management expects each division to earn a 25% return on assets.
Required:
- Calculate profit margin for each division.
- Calculate investment turnover for each division.
- Calculate Return on Investment using the DuPont Formula.
- Calculate residual income for each division.
You must show all your work for credit.
