Question: Walton Corporation's balance sheet indicates that the company has $680,000 invested in operating assets. During 2018, Walton earned operating income of $92,480 on $1,360,000 of sales.
Required: Compute Walton's profit margin for 2018.
Compute Walton's turnover for 2018.
Compute Walton's return on investment for 2018.
Recompute Walton's ROI under each of the following independent assumptions:
(1) Sales increase from $1,360,000 to $1,632,000, thereby resulting in an increase in operating income from $92,480 to $97,920.
(2) Sales remain constant, but Walton reduces expenses, resulting in an increase in operating income from $92,480 to $95,200.
(3) Walton is able to reduce its invested capital from $680,000 to $544,000 without affecting operating income.
Compute Walton's profit margin, turnover and return on investment for 2018. (Round "Profit margin" and "Return on investment" to 1 decimal place.)
Compute Walton's profit margin, turnover and return on investment for 2018. (Round "Profit margin" and "Return on investment" to 1 decimal place.)
Recompute Walton's ROI under each of the following independent assumptions: (Do not round intermediate calculations. Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
(1) Sales increase from $1,360,000 to $1,632,000, thereby resulting in an increase in operating income from $92,480 to $97,920.
(2) Sales remain constant, but Walton reduces expenses, resulting in an increase in operating income from $92,480 to $95,200.
(3) Walton is able to reduce its invested capital from $680,000 to $544,000 without affecting operating income.