Response to the following problem:
Elway Company provided the following income statement for last year:
Sales ..................................................$285,000
Less: Variable expenses ........................... 171,000
Contribution margin .......................$114,000
Less: Fixed expenses ............................... 91,200
Operating income .......................... $ 22,800
At the beginning of last year, Elway had $180,000 in operating assets. At the end of the year, Elway had 200,000 in operating assets.
Required:
1. Compute average operating assets.
2. Compute the margin and turnover ratios for last year.
3. Compute ROI.