E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue $1,360,000 $1,440,000 $1,330,000 Operating expenses 660,000 608,400 941,200 Invested assets 5,000,000 4,200,000 2,700,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y8 Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue Operating expenses Operating income Feedback Area Feedback Question Content Area 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Mutual Fund Division % % Electronic Brokerage Division % % Investment Banking Division % %
E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue $1,360,000 $1,440,000 $1,330,000 Operating expenses 660,000 608,400 941,200 Invested assets 5,000,000 4,200,000 2,700,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y8 Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue Operating expenses Operating income Feedback Area Feedback Question Content Area 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Mutual Fund Division % % Electronic Brokerage Division % % Investment Banking Division % %
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter17: Financial Statement Analysis
Section17.4: Analyzing Financial Statements Using Financial Ratios
Problem 1WT
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E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:
Mutual Fund Division |
Electronic Brokerage Division |
Investment Banking Division |
||||
| Fee revenue | $1,360,000 | $1,440,000 | $1,330,000 | |||
| Operating expenses | 660,000 | 608,400 | 941,200 | |||
| Invested assets | 5,000,000 | 4,200,000 | 2,700,000 |
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
Question Content Area
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.
| Mutual Fund Division |
Electronic Brokerage Division |
Investment Banking Division |
|
| Fee revenue | |||
| Operating expenses | |||
| Operating income | |||
Feedback Area
Question Content Area
2. Using the DuPont formula for
| Division | Profit Margin | Investment Turnover | ROI |
| Mutual Fund Division | % | % | |
| Electronic Brokerage Division | % | % | |
| Investment Banking Division | % | % |
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