Kase Tractor Company Allows Its Divisions to Operate as Autonomous

Essay

Kase Tractor Company allows its divisions to operate as autonomous units.The operating data for 2017 follow:
$$\begin{array} { | l | r | r | r | } \hline &{ \text { Ploughs } } & { \text { Tractors } } & { \text { Combines } } \\\hline \text { Revenues } & \$ 2250000 & \$ 500000 & \$ 4800000 \\\hline \text { Accounts receivable } & 800000 & 152500 & 1435000 \\\hline \text { Operating assets } & 1000000 & 400000 & 1750000 \\\hline \text { Net operating profit } & 220000 & 60000 & 480000 \\\hline \text { Taxable income } & 165000 & 90000 & 385000 \\\hline\end{array}$$
Required:
a.Calculate the investment turnover for each division.
b.Calculate the return on sales for each division.
c.Calculate the return on investment for each division.
d.Which division manager is doing best? Why?
e.What other factors should be included when evaluating the managers?
For parts (b)and (c)income is defined as operating profit.
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