Complete Financial Analysis Discussion Post

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Gnfunypceb

Business Finance

Description

Problem 9-37

    COMPANY

Adam

Basil

Collin

Sales

$8,500,000

$1,500,000

$29,000,000

Income

$765,000

$180,000

$180,000

Capital

$3,200,000

$12,000,000

$12,000,000

1.  Why would you desire the breakdown of ROI into return on sales and turnover on capital?

2.  Compute the return on sales, turnover on capital and ROI for the three companies, and comment on the relative performance as the data permit.

Adam

Basil

Collin

Return on Sales     (income/sales)

9.00%

12.00%

0.62%

Turnover on capital  (sales/ capital)

2.66

0.13

2.42

ROI  (income/ capital)

23.91%

1.50%

1.50%

3.  Discuss the types of strategies that Basil and Collin might be employing.

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