Largo Company recorded for the past year,sales of $750,000 and had average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?

Question

Quizplus · Accepted Answer

To achieve an ROI of 15%, the formula ROI = Margin x Turnover is used. Turnover is calculated as Sales / Average Operating Assets = $750,000 / $375,000 = 2. Therefore, 15% = Margin x 2, which gives Margin = 7.5%.

Largo Company Recorded for the Past Year,sales of $750,000 and Had