Gabbe Industries is a division of a major corporation. Last year the division had total sales of $23,510,300, net operating income of $2,562,623, and average operating assets of $7,018,000. The company's minimum required rate of return is 22%.
Required:
a. What is the division's margin?
b. What is the division's turnover?
c. What is the division's return on investment (ROI)?

Part A:

Division's margin= 10.9%

Part B:

Division's turnover=3.35 time

Part C:

The division's return on investment (ROI)= 36.5%

Explanation:

Part A:

Division's margin=

Division's margin= $2,562,623/$23,510,300

Division's margin= 0.109

Division's margin= 10.9%

Part B:

Division's turnover=

Division's turnover=$23,510,300/$7,018,000

Division's turnover=3.35 time

Part C:

The division's return on investment (ROI)=

The division's return on investment (ROI)= $2,562,623/$7,018,000

The division's return on investment (ROI)= 0.365

The division's return on investment (ROI)= 36.5%

107x106 is the answer