Which of two measures better indicates operating performance

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Comparing profit margin and ROI as performance measures. College Coffee Shops operates coffeehouses on college campuses in three districts. The operating performance for each district follows.

		District
	New Orleans	Chicago	Denver
Sales	$1,900,000	$8,500,000	$10,000,000
Operating Profit	200,000	500,000	1,000,000
Operating Profit	2,000,000	6,250,000	8,000,000

a. Using the operating profit margin percentage as the criterion, which is the most profitable district?

b. Using rate of return investment as the criterion, which is the most profitable?

c. Which of the two measures better indicates operating performance? Explain.

Reference no: EM131208095

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