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RETURN ON ASSETS (ROA) Formula Description: You determine return on assets by dividing net profit by your total asset base. What Does Return On Assets Tell You?

· Wal-Mart employed a low cost strategy, it’s important to assess Wal-Mart’s operational efficiency. Inventory turnover ratio is crucial in its profitability. Return on Asset (ROA) and Working Capital Turnover can measure management effectiveness in asset usages. Cash Conversion Cycle (CCC) shows how long the company’s cash is being tied up by its current operations.

3. Using the cash flow indicator and investment valuation ratios, discuss which company is more likely to have satisfied stockholders.

Compare and contrast an existing organization’s three major functions (i.e., finance, marketing, and operations), and then justify the interdependence that operations have to finance and marketing. Provide examples to support your rationale.

Ben is a 22 year old and works as a photographer. He drinks a lot and goes to parties every single weekend with his friends. Ben has also started using heroin and became addicted to it while trying it out because of his friends. He grew up with his mum and had tough childhood as his mum is a single mum and also was addicted to alcohol. He grew up being exposed to alcohol ever since he was a child and he thinks that drinking alcohol excessively is normal. However, Ben got to the point that he no longer can live without alcohol and heroin and it started to affect his job and

First of all, return on asset (ROA) is a ratio used to measure how efficient a company generates profit using its assets, which is the invested capital. We noticed that HH’s ROA was increasing from 2006 to 2010. However, HH’s ROA for 2011 dropped dramatically from 18.41%(year

According to ROA, ANZ’s profitability fell short of Westpac’s by 0.146%, with the ROA percentage at 0.95% and 1.096% respectively (Appendix A). The difference in profits is caused by Westpac’s substantially higher total assets, which outweigh ANZ’s by $75,740,000. Although ANZ has a greater level of liquid assets, Westpac’s substantially higher loan portfolios generate higher returns. The lower ROA is caused by ANZ’s interest-bearing assets under-performing, or carrying lower risks leading to lower yields, or a greater reliance upon non-interest bearing assets. ROE is linked to ROA through the EM.

1. (10 pts.) Stella Ann Freeman is having a difficult time deciding whether or not to purchase a new car. How would understanding the concept of opportunity costs help her make a decision?

ROA is considered the best overall indicator of the efficiency of assets used in a company. Home Depot and Lowe’s ROA ratio both moved down due to the downturn in the industry but Home Depot was able to improve 2010.

2. What do the results say about how firms in this industry can deliver strong financial returns in different ways?

Based on your analysis above, make at least two (2) recommendations as to how each company could improve its working capital positions. Provide support for your recommendations.

Tire City, Inc. is a rapidly growing retail distributor of automotive tires. Although they have 10 shops located throughout the Northeast region, the bulk of TCI’s inventory is managed at a central warehouse. During the last three years, sales have been growing at a compound annual rate in excess of 20%. With such a great reflection of their excellent service and customer satisfaction in their net income, TCI’s central warehouse is “bulging at the seams”. TCI has decided to expand its warehouse facilities to accommodate future growth, and has requested a five year loan. We, MidBank, previously financed a project for TCI in 1991, which is currently being repaid in equal annual installments. TCI plans to

ROS Return on Sales. Return on sales (ROS) is a ratio utilized to assess the operational efficiency of a company; it is also known as a firm's operating profit margin. It is important because determines how a company is creating profits. Creditor, investors and other debt holders rely on this efficiency ratio because it accurately communicates the percentage of operating cash a company makes on its revenue. Macy’s has a return on sales on January 2016 of 6.13%, while on January 2015 was 8.47%. The decrease of 2.34% is not a good symptom because a low ROS is a sign of low efficiency (FORM 10-K, 2016).

The Total Asset Turnover or ROA (Return on Asset) lets us know how effectively assets generate revenue. Accounts Receivable Turnover tells us how effectively a company is collecting money from sales. As we can see, both companies are doing pretty comparable and so far, this does not explain the sudden cliff on Profit Margin.

Historically, the Du Pont innovation of (ROI) calculations represents one of the most significant turning points in the history of modern accounting and management, (Hounshell, 1998 ). The 1920’s began the Du Pont system company with methods and calculations from leaders, owners, executives, etc. Furthermore, it was the beginning of the integration of financial accounting, capital accounting, and cost accounting. When it comes to return on assets (ROA), they are a (ROI) measure that evaluates the organization’s return or net income relative to the asset base need to generate the income, (Finkler, Ward, & Calabrese, 2013). The Du Pont Company has been the leader of industrial research. Throughout the years with companies emerging, Du Pont’s method was becoming more prominent with owners and executives needing a method for