Return on investment (ROI) is often expressed as follows: Income Investment Read the requirements. Income Revenues Revenues Investment Requirements Requirement 1. What advantages are there in the breakdown of the computation into two separate components? Selec a. The importance of investment turnover as a key to income is stressed. b. The importance of revenues is explicitly recognized. The important components are expressed as ratios or percentages instead of dollar figures. 1. What advantages are there in the breakdown of the computation into two separate components? 2. Fill in the blanks for the following table: C. d. The breakdown stresses the possibility of trading off investment turnover for income as a percentage of revenues. Requirement 2. Fill in the blanks for the following table: (Enter investment turnover to the nearest tenth, X.X.) Companies in Same Industry Revenues Income Company A Company B Company C Revenues $ 1,400,000 $ 1,100,000 Income $ 210,000 $ 165,000 Investment $ 700,000 $ 5,500,000 Income as a percentage of revenues % % 1.5% Investment turnover 2.0 ROI % 3% % A $ $ Investment $ Companies in Same Industry B 1,400,000 $1,100,000 210,000 $ 165,000 700,000 ? $ 5,500,000 с ? ? Income as a percentage of revenues ? ? 1.5% Investment turnover ? ? 2 ROI ? 3% ? After filling in the blanks, comment on the relative performance of these companies as thoroughly as the data permit. Print Done
Return on investment (ROI) is often expressed as follows: Income Investment Read the requirements. Income Revenues Revenues Investment Requirements Requirement 1. What advantages are there in the breakdown of the computation into two separate components? Selec a. The importance of investment turnover as a key to income is stressed. b. The importance of revenues is explicitly recognized. The important components are expressed as ratios or percentages instead of dollar figures. 1. What advantages are there in the breakdown of the computation into two separate components? 2. Fill in the blanks for the following table: C. d. The breakdown stresses the possibility of trading off investment turnover for income as a percentage of revenues. Requirement 2. Fill in the blanks for the following table: (Enter investment turnover to the nearest tenth, X.X.) Companies in Same Industry Revenues Income Company A Company B Company C Revenues $ 1,400,000 $ 1,100,000 Income $ 210,000 $ 165,000 Investment $ 700,000 $ 5,500,000 Income as a percentage of revenues % % 1.5% Investment turnover 2.0 ROI % 3% % A $ $ Investment $ Companies in Same Industry B 1,400,000 $1,100,000 210,000 $ 165,000 700,000 ? $ 5,500,000 с ? ? Income as a percentage of revenues ? ? 1.5% Investment turnover ? ? 2 ROI ? 3% ? After filling in the blanks, comment on the relative performance of these companies as thoroughly as the data permit. Print Done
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter8: Specialized Audit Tools: Attributes Sampling, Monetary Unit Sampling, And Data Analytics Tools
Section: Chapter Questions
Problem 39CYBK
Related questions
Question
None
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning