Question

Fred Inc. has the following financial results for the years 2019 through 2021 for its three regional divisions:

	2019			2020			2021
Revenue
Southwest	$	14,550		$	21,650		$	25,650
Midwest		6,350			6,650			6,850
Southeast		12,050			12,650			12,950
Total	$	32,950		$	40,950		$	45,450
Net Operating Income
Southwest	$	750		$	850		$	1,000
Midwest		900			1,250			1,200
Southeast		650			850			1,250
Total	$	2,300		$	2,950		$	3,450
Average Total Operating Assets
Southwest	$	13,650		$	13,850		$	16,450
Midwest		4,350			3,850			3,850
Southeast		4,950			5,250			5,250
Total	$	22,950		$	22,950		$	25,550

Required:

Calculate 1) return on sales (ROS)(i.e., Margin), 2) asset turnover (AT), and 3) return on investment (ROI) for each division and also for the firm as a whole for each of the three years 2019, 2020, and 2021 and show all your work.

Answer 1

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