AC420-01_Unit_9_Project_HallHawkins - Problem 14-39 Name...

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Problem 14-39 Name: Stephanie HallHawkins Insert your answers in the gray-shaded cells. If an answer is incorrect, the word "wrong" will appear. a. Sales $28,250,000 Less operating expenses 25,885,000 Actual income $2,365,000 Beginning assets $10,200,000 Ending assets 12,300,000 Total assets $22,500,000 Divided by 2 Average assets $11,250,000 Income $2,365,000 Divided by sales 28,250,000 Profit margin 8.37% Sales $28,250,000 Divided by average assets 11,250,000 Asset turnover 2.51 Spruce Enterprises ROI: Asset turnover 2.51 Profit margin 8.37% ROI 21.01% Industry ROI: Asset turnover 1.90 Profit margin 7.00% ROI 13.30% Comment: The company outperformed the industry by more than 7%. They also had a higher asset turnover.
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b. c. Where, as indicated by the performance measures, are the most likely areas to improve performance in the retail lumber stores? They might consider increasing sales prices in order to improve the profit margin, but they must be careful not to decrease the asset turnover ratio. What are the advantages and disadvantages of setting a performance target at the
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This note was uploaded on 08/06/2011 for the course ACCT 420 taught by Professor Hinton during the Spring '11 term at Kaplan University.

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AC420-01_Unit_9_Project_HallHawkins - Problem 14-39 Name...

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