| Margin | 15% |
| Turnover | 2.2 |
| Return On investment | 33% |
| Operarating Assest do not include the investment in other company or undevloped Land |
||
| Ending balance |
Beginig Balance | |
| Cash | 135000 | 134000 |
| Accounts Recevable | 482000 | 340000 |
| Inventory | 485000 | 562000 |
| Plant And Equipment | 778000 | 804000 |
| Total operating Assets | 1880000 | 1840000 |
Average operating Assets = 1880000+1840000 /2
= 1860000
Margin = Net operating Income/ Sales
= 613800 / 4092000
=15%
Turnover = Sales / Average operating Assets
= 4092000 /1860000
=2.2
ROI = Margin x Turnover
= 15% *2.2
=33
Requirement 2
| Net Operating Income | 613800 |
| Minimum Required return 16%*1860000 |
297600 |
| Residual Income | 316200 |
