Question & Answer: Instructions A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the year ended December 31, 20…..

Instructions A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the year ended December 31, 2016, is as follows 4.400.000.00 490000.00 1,910,000.00 1.470.00000 440,000.00 4.000,000.00 Sales 2Cost of goods sold Gross profit sOperating expenses Income from operations s Invested assets

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Instructions A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the year ended December 31, 2016, is as follows 4.400.000.00 490000.00 1,910,000.00 1.470.00000 440,000.00 4.000,000.00 Sales 2Cost of goods sold Gross profit sOperating expenses Income from operations s Invested assets

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1.DuPont formula for rate of return on Investment-

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a)Profit margin = Net Income/Total Assets

= $44000000/400000000

= 11% or 0.11(ans)

b) Investment turnover =Sales/Total assets or investment

= $440000000/400000000

=1.1 times(ans)

c) Rate of return on investment for the commercial division for the past year=

Profit margin* Investment turnover

= 11%*1.1= 12.1% (ans)