A family friend has asked your help in analyzing the operati

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole number.) pany Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: S 430,000 670,000 48,000 S 620,000 S 153,000 S 150,000 15% 19% 13% 13% Percentage Dollar amount $ 59,000 Residual income 5,000

Solution

Fill missing amount :

	Company A	Company B	Company C
Sales	430000	670000	620000
Net operating income	153000*15% = 22950	48000	19500+5000 = 24500
Average operating asssets	153000	48000*100/19 = 252632	150000
Return on investment (ROI)	15%	19%	24500*100/150000 = 16%
Minimum required rate of return
Percentage	13%	59000*100/252632 = 23%	13%
Dollar amount	153000*13% = 19890	59000	150000*13% = 19500
Residual income	22950-19890 = 3060	-11000	5000