ExxonMobil Corporation (XOM) explores, produces, and distributes oil and natural gas. The Coca-Cola Company (KO) produces and distributes soft drink beverages, including Coke. WalMart Stores, Inc. (WMT) operates retail stores and supermarkets. 1. The following data (in millions) were taken from recent financial statements of each company: ExxonMobil Coca-Cola WalMart Net income $19,710 $1,248 $10,523 Total assets at the beginning of the year 330,314 87,270 198,825 Total assets at the end of the year 348,691 87,896 204,572 Compute the return on assets for each company using the preceding data, and rank the companies' return on assets from highest to lowest. Round the return on assets to one decimal place. Return on Assets Rank ExxonMobil % Coca-Cola % WalMart % 2. All of the following statements regarding the rate of return on assets rankings for ExxonMobil, WalMart, and Coca-Cola are true except: ExxonMobil has the highest rate of return on assets due to the high demand for petroleum-based products. WalMart and Coca-Cola have approximately the same rates of return on assets primarily. Coca-Cola has the lowest rate of return since it's operating in a highly competitive market, as well as the increased demand by consumers for healthy beverage alternatives. ExxonMobil's operations have the most risks

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ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

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ExxonMobil Corporation (XOM) explores, produces, and distributes oil and natural gas. The Coca-Cola Company (KO) produces and distributes soft drink beverages, including Coke. WalMart Stores, Inc. (WMT) operates retail stores and supermarkets.

1. The following data (in millions) were taken from recent financial statements of each company:

	ExxonMobil	Coca-Cola	WalMart
Net income	$19,710	$1,248	$10,523
Total assets at the beginning of the year	330,314	87,270	198,825
Total assets at the end of the year	348,691	87,896	204,572

Compute the return on assets for each company using the preceding data, and rank the companies' return on assets from highest to lowest. Round the return on assets to one decimal place.

	Return on Assets	Rank
ExxonMobil	%
Coca-Cola	%
WalMart	%

2. All of the following statements regarding the rate of return on assets rankings for ExxonMobil, WalMart, and Coca-Cola are true except:

ExxonMobil has the highest rate of return on assets due to the high demand for petroleum-based products.
WalMart and Coca-Cola have approximately the same rates of return on assets primarily.
Coca-Cola has the lowest rate of return since it's operating in a highly competitive market, as well as the increased demand by consumers for healthy beverage alternatives.
ExxonMobil's operations have the most risks.

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