Tootsie Roll Industries has two business segments, one for operations in the United States and one...

Tootsie Roll Industries has two business segments, one for operations in the United States and one for operations in Mexico and Canada. The following information (in thousands) comes from a recent annual report.

	Year 2				Year 1
	United States		Mexico and Canada		United States		Mexico and Canada
Sales	$	499,660	$	46,325	$	487,185	$	41,184
Net assets		821,335		25,402		832,260		25,740
Net earnings		55,074		1,200		42,554		1,399

Required:

a. Find the ROI for each segment for each year.

b. Find and analyze segment ROI by using the DuPont method.

Expert Solution

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		Year 2		Year 21
		United	Mexico and	United	Mexico and
		States	Canada	States	Canada
Sales	a	$ 499,660	$ 46,325	$ 487,185	$ 41,184
Net Assets	b	$ 821,335	$ 25,402	$ 832,260	$ 25,740
Net Earnings	c	$ 55,074	$ 1,200	$ 42,554	$ 1,399
ROI	c/b=d	6.7%	4.7%	5.1%	5.4%
Capital Turnover	a/b=e	60.8%	182.4%	58.5%	160.0%
Return on Sales	c/a=f	11.0%	2.6%	8.7%	3.4%

Dupont:
ROI	e*f	6.7%	4.7%	5.1%	5.4%

ekkarill92 answered 1 year ago

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