Saturday, December 5, 2009

Accounting question - ROI?

Can somebody help me with this question.



Barneys Corp gave operating results for 2005 for its three divisions: Clothes, Bedding, and Shoes



Clothes Bedding Shoes



Sales 380,000 1,700,000 2,000,000



Oper Profits 20,000 50,000 100,000



Divisional assts 200,000 625,000 800,000



What is the ROI for each division?



Any help would be great. thanks



Accounting question - ROI?say yes



Also called Return on Total Investment, or ROI, the Return on Total Assets measures the Net Earnings in relation to the Total Assets. The Return on Total Assets identifies how well the investments of the company (the Total Assets) have generated earnings (Net Earnings) back to the company.



ROI = Net earnings/Total assets



ROI for:



Clothes : 20/200 = 10%



Bedding : 50/625 = 8%



Shoes : 100/800 = 12.5%

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