Say you're given:
Sales of $10k
V. costs of $5k
F. costs of $3k
Op Income then would = $2k
With sales margin of 20%
Total Investment=23000
Rate of return=12%
How would you calculate total assets just from this info? I need total assets for ROI, cap turnover & to derive residual income?
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Crickets.
Most of that information is income statement information. You can't calculate total assets from sales, costs, margins, or income.
If this is a brand new company, total investment of 23,000 could be investment in an asset, so total assets would be $23,000. If that isn't it, it is impossible to calculate without additional data.
Either way, you don't need total assets for ROI.
ROI = (Gain - Cost)/Cost
If you are looking for return of 12% on an investment of $23k, just take 12% = (x - $23k) / $23k. Your gain would be $25,760 (or net $2,760).
Maybe you mean average invested assets rather than total?
If that is the case, you can use the formula ROI = Net Op. Income/Average Invested Assets
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