Entrepreneurial Entrepreneurial Entrepreneurial Entrepreneurial Entrepreneurial Entreprene, Exercises of Entrepreneurship

Download Entrepreneurial Entrepreneurial Entrepreneurial Entrepreneurial Entrepreneurial Entreprene and more Exercises Entrepreneurship in PDF only on Docsity! SAMPLE PROBLEMS ON FINANCIAL RATIOS 1.The management of International Heal Medical Company is evaluating the performance of its three (3) divisions. The Booboo Division had an operating profit of ₱24,950 and, on average used assets with a book value of ₱311,900. The Splint Division had an operating profit of ₱17,500 and used average assets of ₱177,950. The Intensive Care Division had an operating profit of ₱28,500 and average assets of ₱475,000. The company plans to award the Intensive Care Division, relying on its high operating profit. Should the management continue with this decision? Justify your answer. • Booboo Division • Splint Division • Intensive Care Division Intensive Care has a 6% ROI, given. ROI measures each division's performance. ROI=Operating Profit/Average Used Assets. Multiplying the value by 100 gives the percentage. Since ICU has the lowest ROI, they perform poorly. It's best to rethink this division's allocation. 2.Charlie’s Construction Company is a growing construction business with a few contracts to build storefronts in Pasay. Charlie’s balance sheet shows beginning assets of ₱1,000,000 and an ending balance of ₱2,000,000 assets. During the current year, Charlie’s company had a net income of ₱20,000,000. Compute the company’s return on assets and interpret the results. Beginning assets ₱1,000,000 Ending assets ₱2,000,000 Net income ₱20,000,000 Each peso Charlie invested in assets yielded a net income of 1,333.3%.