Calculating Return on Investment for Stewart Industries Divisions
a. Compute the return on investment for each division.
Division Percent Retail Division fill in the blank 1 % Commercial Division fill in the blank 2 % Data Analytics Division fill in the blank 3 %
a. Return on Investment Calculation
The return on investment (ROI) for the Retail Division, Commercial Division, and Data Analytics Division are 26%, 20%, and 16% respectively.
To calculate ROI, we divide the operating income by the invested assets and multiply by 100 to get a percentage.
Calculating Return on Investment
Retail Division: ROI = (11,700,000 / 45,000,000) * 100 = 26%
Commercial Division: ROI = (12,600,000 / 63,000,000) * 100 = 20%
Data Analytics Division: ROI = (1,920,000 / 12,000,000) * 100 = 16%
The most profitable division per dollar invested is the Retail Division with an ROI of 26%.
Return on Investment (ROI) by dividing the operating income by invested assets and then multiplying by 100. The Retail Division's ROI is 26%, the Commercial Division's ROI is 20%, and the Data Analytics Division's ROI is 16%.