Question

In: Operations Management

Dynex Company had the following income statement for last year: Sales $200,000 Less: COGS   100,000 Gross...

Dynex Company had the following income statement for last year:

Sales $200,000
Less: COGS   100,000
Gross Profit $100,000
Less: Selling & Admin. Expense     40,000
Operating income $  60,000

Beginning assets were $280,000, and ending assets were $300,000.

Use the excel document found in the Assignments tab to answer the questions below.

  1. Average operating assets were:
  2. Margin was:
  3. Turnover was:
  4. Return on investment was:

Solutions

Expert Solution

Important formula:

Average Operating Asset = (Beginning Assets + Ending Assets)/2

Margin=(Sales-COGS)/Sales

Turnover=(COGS/Average Operating Asset)

Return on Investment=(Operating Income/COGS or Investment) in Percentage format

1 B C D E
2 Sales $200,000
3 Less: COGS $100,000
4 Gross Profit $100,000
5 Less: Selling & Admin. Expense $40,000
6 Operating income $60,000
7 Average Operating Asset = (Beginning Assets + Ending Assets)/2 290000
8 Margin=(Sales-COGS)/Sales 50%
9 Turnover=(COGS/Average Operating Asset) 0.345
10 Return on Investment=(Operating Income/COGS or Investment) in Percentage format 60%

Excel formula:

1 B C D E
2 Sales 200000
3 Less: COGS 100000
4 Gross Profit 100000
5 Less: Selling & Admin. Expense 40000
6 Operating income 60000
7 Average Operating Asset = (Beginning Assets + Ending Assets)/2 =(280000+300000)/2
8 Margin=(Sales-COGS)/Sales =(E2-E3)/E2
9 Turnover=(COGS/Average Operating Asset) =E3/E7
10 Return on Investment=(Operating Income/COGS or Investment) in Percentage format =E6/E3

keosha answered 3 months ago
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