Cash Company has income from operations of $48,000, invested assets of $300,000, and sales of $480,000. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places.

10%; 1.6 times and 16%

Explanation:

The computations are shown below:

As we know that

Profit margin is

= Income from operation : Sales * 100

= $48,000 : $480,000

= 10%

Investment turnover is

= Sales : Invested assets

= $480,000 : $300,000

= 1.6 times

And,

Return on investment is

= Profit margin * investment turnover

= 10% * 1.6 times

= 16%

Therefore, we applied the above formulas