Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 37

ROI, Return On Sales, and Asset Turnover Roberts, Inc., has the following financial results for the years 2010 through 2012 for its three regional divisions:

	2010	2011	2012
Revenue
Southwest	$15,000	$22,000	$26,000
Midwest	6,600	7,200	7,000
Southeast	12,500	12,800	13,300
Total	$34,100	$42,000	$46,300
Net Operating Income
Southwest	$ 1,100	$ 1,200	$ 1,400
Midwest	1,250	1,500	1,550
Southeast	900	1,200	1,600
Total	$ 3,250	$ 3,900	$ 4,560
Average Total Assets
Southwest	$14,000	$14,000	$16,500
Midwest	4,200	4,200	4,200
Southeast	5,300	5,600	5,600
Total	$23,500	$23,800	$26,300

Required Calculate return on sales (ROS), asset turnover (AT) and return on investment (ROI) for each division and for the firm as a whole for each of the three years 2010, 2011, and 2012.

Step 1 of 4

The formula for calculating return on investment ROI is as follows: