Reference no: EM132344536

Question

Domino's Pizza, Inc. is the second-largest pizza chain in the world. In the United States, Domino's has 377 company-owned restaurants and 4,690 franchised restaurants. In addition, Domino's has a supply chain that manufactures and delivers dough and other food products to all the domestic restaurants.

Franchisees are required to purchase food products from the Domino's supply chain as part of their franchise agreement. Thus, in the United States, Domino's has three segments: Company-Owned Restaurants, Franchised Restaurants, and Supply Chain. Operating data for these three segments in the United States are as follows (in millions):

Company-        Owned Restaurants    Franchised Restaurants   Supply Chain

Sales                   $348                     $230                              $1,262

Cost of Sales 267 1,132

General and administrative expenses* 25 125 100

Invested assets** 32 30 146

* Allocation to segments assumed

** Allocation between Company-Owned and Franchised assumed

A. Determine the income from operations for each segment.

B. Determine the profit margin for each segment. (Round percentages to one decimal place.)

C. Determine the investment turnover for each segment. (Round to one decimal place.)

D. Use the DuPont formula to determine the return on investment for each segment. (Round to nearest whole percent.)