Question

Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year:

Sales $ 810,000
Net operating income $ 21,060
Average operating assets $ 100,000

The following questions are to be considered independently.

Compute the Springfield club’s return on investment (ROI). (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

To compute the return on investment (ROI) for Fitness Fanatics' Springfield Club, the net income for the past year is required, which is not provided. The formula for ROI is (Net Income / Average Operating Assets) × 100. Once the net income is known, the ROI can be accurately calculated.

Step-by-step explanation:

The return on investment (ROI) for Fitness Fanatics' Springfield Club can be calculated if we have the necessary figures such as net income and average operating assets. The ROI is computed using the formula:

ROI = (Net Income / Average Operating Assets) × 100

However, in the information provided, the net income figure is missing. Without this piece of data, we cannot compute the ROI. The average operating assets for the Springfield Club is given as $100,000. To calculate the ROI, you would need the net income generated by Springfield club for the past year, which should be provided in the club's financial results.

Once the net income is known, you simply divide it by the average operating assets and multiply by 100 to get the percentage of the ROI.