For the past year, Allargando Company recorded sales of $500,000 and average operating assets of $250,000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%?

Question

Quizplus · Accepted Answer

To achieve an ROI of 12%, the company needs to have a margin that results in a net income of $30,000 ($250,000 * 12%). The margin is calculated as (Net Income / Sales) * 100. Therefore, ($30,000 / $500,000) * 100 = 6.00%.

For the Past Year, Allargando Company Recorded Sales of $500,000