East Valley Manufacturing had gross profit of $450,000 and selling & administrative expenses of $275,000 last year. The company also began last year with $1,800,000 of operating assets and ended the year with $1,500,000 of operating assets.
Calculate Return on Investment for East Valley Manufacturing.
ROI: (450,000 %u2013 275,000) X 450,000 = 1.06%
450,000 1,650,000
Part II.
Saguaro Boat Engines had sales of $6,400,000, cost of goods sold of $4.8 million, and selling & administrative expenses of $650,000 for its most recent year of operation. The company%u2019s tax rate is 40%. The total Capital Employed by the firm is $5,000,000. The following information is also available.
- Debt/Stock Int Rate
- Long-Term Debt $1,000,000 12%
- Common Stock $3,000,000 8%
1In good order and form, prepare an income statement for Saguaro.
2.Calculate EVA.