Average operating assets

Question

Input the formulas need to calculate margin, turnover, ROI and residual income.Check your worksheet by changing the average operating assets in cell B6 to $9,000,000, net operating income in cell B5 to $5,400,000 and the minimum required rate of return in cell B7 to 16%. The ROI should nw 60% and the residual income should now be $3,960,000. If you do not get these answers, find the errors in your worksheet and correct them.

Enter a formula into each of the cells marked with a ? below
Review Problem: Return on Investment (ROI) and Residual Income

Data:

• Sales $25,000,000
• Net operating income $3,000,000
• Average operating assets $10,000,000
• Minimum required rate of return 25%

Compute the ROI:

• Margin ?
• Turnover ?
• ROI ?

Compute the residual income :

1. Average operating assets ?
2. Net operating income ?
3. Minimum required return ?
4. Residual income ?