Briggs Company has operating income of $13,824, invested assets of $96,000, and sales of $230,400. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a.  Profit margin   ? b.  Investment turnover   ? c.  Return on investment   ?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Profit Margin, Investment Turnover, and ROI

Briggs Company has operating income of $13,824, invested assets of $96,000, and sales of $230,400. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places.

a.  Profit margin   ?
b.  Investment turnover   ?
c.  Return on investment   ?

 

Expert Solution
Step 1

a. Profit margin;

Profit margin=Income from operationsSales×100=$13,824$230,400×100=6%

Step 2

b. Investment turnover;

Investment turnover=SalesInvested assets=$230,400$96,000=2.4

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