1.
Concept Introduction:
Accounting has formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
To Calculate:
Return on assets.
2.
Concept Introduction:
Accounting has formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
To Calculate:
Successful in total sales.
3.
Concept Introduction:
Accounting has formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
To Calculate:
Successful in return over assets.
4.
Concept Introduction:
Accounting has formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
To Calculate:
One paragraph on over which company is better for the option of investment.
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Check out a sample textbook solutionChapter 1 Solutions
FINANCIAL ACCT: INFORMATION LL +CNCT ACC
- Coca-Cola and PepsiCo both produce and market beverages that are direct competitors. Key financialfigures for these businesses for a recent year follow.Key Figures ($ millions) Coca-Cola PepsiCoSales . $46,542 $66,504Net income . 8,634 6,462Average assets . . . . . . . . . . . . . . . . . . . . 76,448 70,518Required Write a one-paragraph memorandum explaining which company you would invest your money in and why. (Limit your explanation to the information provided.)arrow_forwardCoca-Cola and PepsiCo both produce and market beverages that are direct competitors. Key financialfigures for these businesses for a recent year follow.Key Figures ($ millions) Coca-Cola PepsiCoSales . $46,542 $66,504Net income . 8,634 6,462Average assets . . . . . . . . . . . . . . . . . . . . 76,448 70,518Required Compute return on assets for (a) Coca-Cola and (b) PepsiCo.arrow_forwardCoca-Cola and PepsiCo both produce and market beverages that are direct competitors. Key financial figures for these businesses for a recent year follow. Which company is more successful in its total amount of sales to consumers?arrow_forward
- AT&T and Verizon produce and market telecommunications products and are competitors. Key financial figures for these businesses for a recent year follow. Key Figures ($ millions) AT&T Verizon Sales . $126,723 $110,875 Net income . 4,184 10,198 Average assets . . . . . . . . . . . . . . . . . . . . 269,868 225,233 Required 1. Compute return on assets for (a) AT&T and (b) Verizon. 2. Which company is more successful in the total amount of sales to consumers? 3. Which company is more successful in returning net income from its assets invested?arrow_forwardThe information for three businesses operating in the same industry is provided in the table that follows: BUSINESS COMPANY A COMPANY B COMPANY C Sales $ 300,000 $ 420,000 $ 380,000 Net income $ 18,000 $ 20,000 $ 19,000 Net profit margin ? ? ? Based on this data, calculate the net profit margin for each company. What is an analyst most likely to conclude about the profitability of the businesses? Group of answer choices Company A, is more profitable than company B and more profitable than company C. Company C is more profitable than company A, but less profitable than company B. Company B is more profitable than company A and less profitable than company C. Company C is more profitable than company A and less profitable than company B.arrow_forwardCola Company and Pop Company both produce and market beverages that are direct competitors. Key financial figures for these businesses for a recent year follow: Key Figures ($ millions) Cola Company Pop Company Sales $ 45,660 $ 65,072 Net income 9,300 7,107 Average assets 75,000 69,000 Required: 1. Compute return on assets for Cola Company and Pop Company. (Enter values in $ millions.)arrow_forward
- AT&T and Verizon produce and market telecommunications products and are competitors. Key financial figures for these businesses for a recent year follow. Which company is more successful in returning net income from its assets invested?arrow_forwardFollowing are data for BioBeans and GreenKale, which sell organic produce and are of similar size. Average total assets Net sales Net income BioBeans $227,500 115,000 11,375 Greenkale $174,000 69,600 2,800 Required: 1a. Compute the profit margin for both companies. 1b. Compute the return on total assets for both companies. 2. Based on analysis of these two measures, which company is the preferred investment?arrow_forwardAT&T and Verizon produce and market telecommunications products and are competitors. Key financial figures for these businesses for a recent year follow.Compute return on assets for (a) AT&T and (b) Verizon.arrow_forward
- The information for three businesses operating in the same industry is provided in the table that follows: BUSINESS SNOWHILLS WHITEFROST CUMMULUS Sales Revenue $ 500,000 $ 420,000 $ 505,000 Total Expenses $ 440,000 384,300 453,500 Compute the net profit margin for each of the businesses. Which of the three businesses do you consider is more profitable? Group of answer choices They are all the same Whitefrost Cummulus Snowhillsarrow_forwardThe below information relates to Drake Ltd which manufactures and sells commercial kitchen equipment. The company is constantly profitable. Drake Ltd’s financial statement ratios are as follows: For each of the following transactions or events, indicate the directional effect (increase, decrease, no change) on the Profit Margin, Current Ratio and Debt to Equity in the table below. Note that you must write either ‘increase’, ‘decrease’ or ‘no change’. Consider each transaction independently of all the other transactions. a. Drake Ltd borrowed an additional $200,000 as short-term, 6-month loan from the bank. b. Sold obsolete inventory purchased for $75,000 for $50,000 cash c. Paid $100,000 dividends to shareholders (previously declared)arrow_forwardComparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the back of the book and answer the following questions. What was the total revenue for each company for the most recent year? By what percentage did each companys revenue increase or decrease from its total amount in the prior year? What was each companys net income for the most recent year? By what percentage did each companys net income increase or decrease from its net income for the prior year? What was the total asset balance for each company at the end of its most recent year? Among its assets, what was the largest asset each company reported on its year-end balance sheet? Did either company pay its stockholders any dividends during the most recent year? Explain how you can tell.arrow_forward
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