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Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI)

Forchen, Inc., provided the following information for two of its divisions for last year:

	Small Appliances Division	Cleaning Products Division
Sales	$41,604,000	$34,800,000
Operating income	3,328,320	1,044,000
Operating assets, January 1	6,394,000	5,600,000
Operating assets, December 31	7,474,000	6,000,000

Required:

1. For the Small Appliances Division, calculate:

a. Average operating assets	$ fill in the blank 1
b. Margin	fill in the blank 2	%
c. Turnover	fill in the blank 3
d. Return on investment (ROI)	fill in the blank 4	%

2. For the Cleaning Products Division, calculate:

a. Average operating assets	$ fill in the blank 5
b. Margin	fill in the blank 6	%
c. Turnover	fill in the blank 7
d. Return on investment (ROI)	fill in the blank 8	%

3. What if operating income for the Small Appliances Division was $2,080,200? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios. When required, round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35. Enter "0", where ever required.

Average operating assets	HigherLowerUnaffected	by fill in the blank 10%
Margin	HigherLowerUnaffected	by fill in the blank 12%
Turnover	HigherLowerUnaffected	by fill in the blank 14%
Return on investment (ROI)	HigherLowerUnaffected	by fill in the blank 16%

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