Problem 1 Two companies, ABC and XYZ have the following information: АВС XYZ $100,000 1,000,000 1,500,000 $200,000 1,500,000 2,000,000 Income Investment Sales A. Calculate the return on assets for each company B. Calculate the return on assets for each company using margin and turnover C. Calculate return on assets if income increases by 25% D. Calculate return on assets if investment increases by 25%

Problem 1 Two companies, ABC and XYZ have the following information: АВС XYZ $100,000 1,000,000 1,500,000 $200,000 1,500,000 2,000,000 Income Investment Sales A. Calculate the return on assets for each company B. Calculate the return on assets for each company using margin and turnover C. Calculate return on assets if income increases by 25% D. Calculate return on assets if investment increases by 25%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter2: Analysis Of Financial Statements

Section: Chapter Questions

Problem 11PROB

See similar textbooks

Similar questions

Return on assets The following data (in millions) were adapted from recent financial statements of Tootsie Roll Industries Inc. (TR): Using your answers to MBA 1-3, compare the markup percentages and return on assets for Hershey and Tootle Roll.
Return on assets The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9 of this chapter. Based upon these statements, answer the following questions. The percent that a company adds to its cost of sales to determine the selling price is called a markup. That is Hershey’s markup percent? Round to one decimal place.
Working Capital and Current Ratio The balance sheet of Kapinski Inc. includes the following items: Required Determine the current ratio and working capital. Kapinski appears to have a positive current ratio and a large net working capital. Why would it have trouble paying bills as they come due? Suggest three things that Kapinski can do to help pay its bills on time.
Analyze Target The following data (in millions) are taken from the financial statements of Target Corporation (TGT), the owner of Target stores: a. For Target, determine the amount of change in millions and the percent of change rounded to one decimal place from Year 1 to Year 2 for: 1. Revenue 2. Operating expenses 3. Operating income b. What conclusions can you draw from your analysis of the revenue and total operating expenses?
Analyze and compare Alphabet (Google) and Microsoft Alphabet Inc. (GOOG) and Microsoft Corporation (MSFT) design and distribute consumer and enterprise software, including overlaps in search, business productivity, and mobile operating systems. Alphabets primary source of revenue is from advertising, while Microsofts is from software subscription and support fees. The following year-end data (in millions) were taken from recent balance sheets for both companies: a. Compute the working capital for each company for both years. b. Which company has the larger working capital at the end of Year 2? c. Is working capital a good measure of relative liquidity in comparing the two companies? Explain. d. Compute the current ratio for both companies. Round to one decimal place. e. Which company has the larger relative liquidity based on the current ratio? f. Based on your analysis, comment on the short-term debt-paying ability of these two companies.