Reference no: EM132382181

Question

Gulfcoast Selections is a restaurant chain operating in select cities in Florida. Select financial data is presentedbelow to provide you with the necessary content for perfromance evaluation purposes.

TampaFort MyersPanama City RestaurantRestaurantRestaurantTotalSales revenue3,500,0001,600,0001,400,0006,500,000

Variable costs

975,000475,000460,0001,910,000Fixed costs1,860,000725,000700,0003,285,000Operating income665,000400,000240,0001,305,000

Interest costs on long-term debt at 10%450,000Income before income taxes855,000Income taxes at 30% 256,500

Net income598,500Net book values at the end of 2018:Current assets660,000500,000400,0001,560,000Long-term assets2,340,0001,500,000600,0004,440,000

Total assets3,000,0002,000,0001,000,0006,000,000Current liabilities300,000150,00050,000500,000

Long-term debt4,500,000Stockholders' equity1,000,000Total liabilities and stockholders' equity6,000,000

Requirement One:Calculate ROI for each of the three restaurants by using the condensed ROI formula

Requirement Two:Calculate Profit Margin (Return on Sales) for each Calculate Asset Turnover for each

Requirement Three:Calculate ROI for each of the three again, butassume assets decrease by 200,000 for each one.Sales and costs remain the same as presented.

Requirement Four:Calculate ROI for each of the three again, butassume sales increase by 10% for each one.Assets and fixed costs remain the same as presented.