ADM2341P Quiz3 W2009 Sol

ADM2341P Quiz3 W2009 Sol - Solution Quiz 3 Managerial...

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Unformatted text preview: Solution Quiz 3 Managerial Accounting Winter 2009 Grade /20 ADM2341 Professor Eden STUDENT NAME: ...................................................... STUDENT NUMBER: .................................................... Instructions : Answer all questions in this booklet. Please limit your answer to the space provided. The use of standard abbreviations (O/H for Overhead and DM for direct material is quite acceptable.. Please do not ask the invigilators questions. Make reasonable assumptions where necessary. .Language dictionaries are allowed. Statement of Academic Integrity The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of another student. Without limiting the generality of this definition, academic fraud occurs when a student commits any of the following offences: plagiarism or cheating of any kind, use of books, notes, mathematical tables, dictionaries or other study aid unless an explicit written note to the contrary appears on the exam, to have in his/her possession cameras, radios (radios with head sets), tape recorders, pagers, cell phones, or any other communication device which has not been previously authorized in writing. Statement to be signed by the student: I have read the text on academic integrity and I pledge not to have committed or attempted to commit academic fraud in this examination. Signed:______________________________________ Note: an examination without this signed statement will not be graded and will receive an exam grade of zero. Q.1( 5 points) Johnson, First Star, and Nolan Bay are three companies that operate in the retail clothing industry. Some information on each of these companies for 2007 follows: Johnson First Star Nolan Bay Average total assets Revenues Expenses $ 6,300,000 12,600,000 11,340,000 $ 5,400,000 16,200,000 15,228,000 $ 7,200,000 14,400,000 12,420,000 Income 1,260,000 972,000 1,980,000 Required: a. For each company, calculate profit margin, asset turnover, and return on investment. b. Which of these companies appears to be performing best? Why? ROI?ROA = Margin * Turnover Income/Sales * Sales/AOA Johnson 1,260/12,600 * 12,600/6,300 10% 2 20% First Star 972/16,200 * 16,200/5,400 6% * 3 18% Nolan Bay 1,980/14,400 * 14,400/7,200 13.7% * 2 25.8% ROA is the best measure of performance in this case and that is Nolan Bay.......................ROA is the best measure of performance in this case and that is Nolan Bay....
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This note was uploaded on 02/03/2010 for the course ADM ADM2341 taught by Professor Edden during the Winter '09 term at University of Ottawa.

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ADM2341P Quiz3 W2009 Sol - Solution Quiz 3 Managerial...

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