CENGAGENOWV2 FOR WARREN'S SURVEY OF AC
8th Edition
ISBN: 9781305961975
Author: WARREN
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 1.5.1MBA
Return on assets
Pfizer Inc. (PFE) discovers, produces, and distributes medicines, including Celebrex and Lipitor. Ford (F) Motor Co. develops, markets, and produces automobiles and trucks. Microsoft Corporation (MSFT) develops, produces. and distributes a variety of computer software and hardware products including Windows, Office, Excel, and the Xbox.
Without computing thy return on assets, rank from highest to lowest Pfizer, Ford, and Microsoft in terms of their return on assets.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Trimax Solutions develops software to support e-commerce. Trimax incurs substantial computer software development costs as well as substantial research and development (R&D) costs related to other aspects of its product line. Under GAAP, if certain conditions are met, Trimax capitalizes software development costs but expenses the other R&D costs. The following information is taken from Trimax’s annual reports ($ in thousands):
R&Dcosts....................... Netincome....................... Totalassets(atyear-end) ........... Equity(atyear-end)................ Capitalized software costs
Unamortized balance (at year-end) . . Amortization expense . . . . . . . . . . . .
Required:
1999
$ 400 312 3,368 2,212
20 4
2000
$ 491 367 3,455 2,460
31 7
2001
$ 216 388 3,901 2,612
2002
$ 212 206 4,012 2,809
2003
$ 355 55 4,045 2,889
31 13
2004
$ 419 81 4,077 2,915
42 15
2005
$ 401 167 4,335 3,146
43 15
2006
$ 455 179 4,650 3,312
36 14
27 22 9 12
CHECK
(a) Year2006,$7
CHECK
(e)…
Home Demo reported the following results.
Sales
$ 95
billion
Net income
$ 8
billion
Average total assets
$ 42
billion
(a) Compute Home Demo's return on assets.
(b) Is Home Demo's return on assets better than the 11% return of Lows Hardware (a competitor)?
This problem is related to contingencies and liabilities:
PROBLEM: CONTINGENCIES
Tesselek Technology, Inc., is a relatively new company and has been operating for only the past five years. It was set up by two leading scientists Mr. Tess and Mr. Lek. The company is involved in the development of high speed electric cars which are in high demand. The company has enjoyed very rapid growth and equally high profitability. Although the company has employed an excellent group of well competent employees, its overall future development plans were highly dependent on the two senior scientists.
On November 3, 2020, the two scientists had an accident in a race to test their new car model. Both were killed in that accident and now, the company's future plans have come to a near dead stop. The stock market answered badly to this news, the company stock price had dropped nearly by 70% and the remaining members of the Board of Directors have instructed the CFO to account for this loss of market…
Chapter 1 Solutions
CENGAGENOWV2 FOR WARREN'S SURVEY OF AC
Ch. 1 - Prob. 1SEQCh. 1 - The resources owned by a business are called: A....Ch. 1 - A listing of a business entity’s assets,...Ch. 1 - If total assets are $20,000 and total liabilities...Ch. 1 - Prob. 5SEQCh. 1 - Prob. 1CDQCh. 1 - Prob. 2CDQCh. 1 - Prob. 3CDQCh. 1 - Prob. 4CDQCh. 1 - Prob. 5CDQ
Ch. 1 - Prob. 6CDQCh. 1 - Prob. 7CDQCh. 1 - Prob. 8CDQCh. 1 - Prob. 9CDQCh. 1 - Prob. 10CDQCh. 1 - Briefly describe the nature of the information...Ch. 1 - Prob. 12CDQCh. 1 - What particular item of financial or operating...Ch. 1 - Prob. 14CDQCh. 1 - On October 1, Wok Repair Service extended an offer...Ch. 1 - Prob. 16CDQCh. 1 - Prob. 1.1ECh. 1 - Prob. 1.2ECh. 1 - accounting equation The total assets and total...Ch. 1 - accounting equation The total assets and total...Ch. 1 - accounting equation Determine the missing amount...Ch. 1 - accounting equation Determine the missing amounts...Ch. 1 - Net income and dividends The income statement of a...Ch. 1 - Net income and stockholders’ equity for four...Ch. 1 - Accounting equation and Income statement Staples,...Ch. 1 - Prob. 1.10ECh. 1 - Income statement items Based on the data presented...Ch. 1 - Financial statement items Identify each of the...Ch. 1 - Statement of stockholders’ equity Financial...Ch. 1 - Income statement Maynard Services was organized on...Ch. 1 - Prob. 1.15ECh. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Statement of cash flows Indicate whether each of...Ch. 1 - Prob. 1.19ECh. 1 - Statement of cash flows Looney Inc. was organized...Ch. 1 - Prob. 1.21ECh. 1 - Financial statement items Amazon.com, Inc., (AMZN)...Ch. 1 - Income statement Based on the Amazon.com, Inc.,...Ch. 1 - Financial statement items Though the McDonald’s...Ch. 1 - Financial statements Outlaw Realty, organized...Ch. 1 - Accounting concepts Match each of the following...Ch. 1 - Prob. 1.27ECh. 1 - Income statement, retained earnings statement, and...Ch. 1 - Income statement, retained earnings statement, and...Ch. 1 - Income statement, retained earnings statement, and...Ch. 1 - Prob. 1.2.1PCh. 1 - Missing amounts from financial statements Obj.4...Ch. 1 - Income statement, retained earnings statement, and...Ch. 1 - Income statement, retained earnings statement, and...Ch. 1 - Income statement, retained earnings statement, and...Ch. 1 - Statement of cash flows The following cash data...Ch. 1 - Financial statements, including statement of cash...Ch. 1 - Financial statements, including statement of cash...Ch. 1 - Financial statements, including statement of cash...Ch. 1 - Financial statements, including statement of cash...Ch. 1 - Quantitative metrics Interpublic Group of...Ch. 1 - Prob. 1.1.2MBACh. 1 - Quantitative metrics JetBlue Airways Corporation...Ch. 1 - Prob. 1.2.2MBACh. 1 - Return on assets The financial statements of The...Ch. 1 - Prob. 1.3.2MBACh. 1 - Prob. 1.3.3MBACh. 1 - Prob. 1.3.4MBACh. 1 - Return on assets The financial statements of The...Ch. 1 - Return on assets The financial statements of The...Ch. 1 - Return on assets The financial statements of The...Ch. 1 - Return on assets The following data (in millions)...Ch. 1 - Return on assets The following data (in millions)...Ch. 1 - Return on assets The following data (in millions)...Ch. 1 - Prob. 1.4.4MBACh. 1 - Return on assets The following data (in millions)...Ch. 1 - Return on assets Pfizer Inc. (PFE) discovers,...Ch. 1 - Return on assets Pfizer Inc. (PFE) discovers,...Ch. 1 - Prob. 1.5.3MBACh. 1 - Prob. 1.6.1MBACh. 1 - Return on assets ExxonMobil Corporation (XOM)...Ch. 1 - Return on assets ExxonMobil Corporation (XOM)...Ch. 1 - Return on assets Tiffany & Co. (TIF) designs and...Ch. 1 - Return on assets Tiffany & Co. (TIF) designs and...Ch. 1 - Prob. 1.1CCh. 1 - Ethics and professional conduct in business...Ch. 1 - Prob. 1.2.2CCh. 1 - How businesses make money Assume that you are the...Ch. 1 - How businesses make money Assume that you are the...Ch. 1 - How businesses make money Assume that you are the...Ch. 1 - Prob. 1.4CCh. 1 - The accounting equation Review financial...Ch. 1 - Prob. 1.6C
Additional Business Textbook Solutions
Find more solutions based on key concepts
Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements Koontz Comp...
Introduction To Managerial Accounting
BE1-7 Indicate which statement you would examine to find each of the following items: income statement (IS), ba...
Financial Accounting: Tools for Business Decision Making, 8th Edition
The amount that should be recorded by Company R for building under historical cost principle.
Financial Accounting (11th Edition)
Dave Nelson recently retired at age 48, courtesy of the numerous stock options he had been granted while presid...
Managerial Accounting: Creating Value in a Dynamic Business Environment
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals of Cost Accounting
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Amazon.com, Inc. is the worlds leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. is the worlds leading Internet television network. Both companies compete in the digital media and streaming space. However, Netflix is more narrowly focused in the digital streaming business than is Amazon. Sales and average book value of fixed assets information (in millions) are provided for Amazon and Netflix for a recent year as follows: a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. b. Which company is more efficient in generating sales from fixed assets? c. Interpret your results.arrow_forwardWhich of the following business strategies is most likely toincrease the net cash flows of a software developer in theshort run but reduce them over a longer term?a. Develop software that is more costly to create but easierto update and improve. b. Lower the price of existing versions of products as cus-tomer demand begins to fall. c. Reduce expenditures for the purpose of developing newproducts.d. Purchase the building in which the business operates(assume the company currently rents this location).arrow_forwardTexas Instruments (TI) designs and manufactures semiconductor products for use in computers, telecommunications equipment, automobiles, and other electronics-based products. The manufacturing of semiconductors is highly capital-intensive. Hewlett-Packard Corporation (HP) manufactures computer hardware and various imaging products, such as printers and fax machines. Exhibit 4.26 presents selected data for TI and HP for three recent years. Exhibit 4.25 Exhibit 4.26 REQUIRED a. Compute the fixed assets turnover for each firm for Years 1, 2, and 3. b. Suggest reasons for the differences in the fixed assets turnovers of TI and HP. c. Suggest reasons for the changes in the fixed assets turnovers of TI and HP during the three-year period.arrow_forward
- Operating, Investing, and Financing Activities The following is information about three different companies. 1. Noon Wakeup Company is a software game development company that creates titles for the Android operating system. The company recently launched its first software title. The company is expanding its operations by hiring additional developers and administrative staff. Noon Wakeup is not yet profitable, but it expects to show a profit within 2 years. Investors view the company as being on the cutting edge with its technology and have continued to invest in the company. Noon Wakeup has not yet borrowed money, but is considering doing so in the future. 2. Steel Grid Company is a textile company located in Waynesboro, NC. The company is experiencing its 20th year of profitability. Management is concerned by the recent economic downturn in the textile business, which has hurt sales in the 3 most recent fiscal years. Next year the company expects to just break even. For this reason, the company is not expanding and is only replacing fully depreciated equipment in its machine intensive manufacturing business. Steel Grid- pridcs itself in paying dividends and having no debt on its balance sheet. 3. Device Driver Company is a technology manufacturing company located in Bloomington, IN. The company has just introduced its 10th new product and is the leader in market share for its industry. The company continues to invest in new equipment and property and to expand by purchasing its competitors. The company has yet to pay dividends, but it is considering doing so in the future. The companys largest current asset is cash, as a result of its high profit margin; because of this, the company has no need for external sources of cash. Required: For each company, prepare a report examining whether you think the companys current cash flows from each activity (operating, investing, and financing) will be positive (the activity provides cash) or negative (the activity uses cash). Provide support for your answers.arrow_forwardAT&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_forwardCrude Company has 2 product lines - product lines are considered an investment center Average Product Line Sales Net Income Invested AssetsToy train sets $500,000 $300,000 $1,200,000Toy airplanes $400,000 $280,000 $1,000,000 Compute return on investment for Toy Train set product line. Write as a whole number Compute return on investment for Toy airplanes product line. Write as a whole number Using return on investment, which product line is most efficient at using assets to generate returns for the company? Compute Residual Income for Toy Train sets. Report the amount in dollars Compute Residual Income for Toy Airplanes. Report the amount in dollars Which product line generated the most residual income for the company? Compute profit margin for Toy Train set product line. Report the percentage as a whole number Which product line generated the most net…arrow_forward
- Required information [The following information applies to the questions displayed below.] Family Games, Inc., is a privately owned company with annual sales from a variety of wholesome electronic games that are designed for use by the entire family. The company sees itself as family-oriented and with a mission to serve the public. However, during the past two years, the company reported a net loss due to cost-cutting measures that were necessary to compete with overseas manufacturers and distributors. Yeah, I know all of the details weren’t completed until January 2, 2019, but we agreed on the transaction on December 30, 2018. By my way of reasoning, it’s a continuation transaction and the $12 million revenue belongs in the results for 2018. What’s more, the goods were on the delivery truck on December 31, 2018 waiting to be shipped after the New Year. This comment was made by Carl Land, the CFO of Family Games, to Helen Strom, the controller of Family Games, after Strom had expressed…arrow_forwardReturn on net operating assets ( RNOA = NOPAT/Average NOA) is commonly used to evaluate a companies financial performance. If managers cannot increase NOPAT, they can still increase RNOA by reducing the amount of net operating assets (NOA). Listed below are four operating items that can be effectively managed to reduce operating assets, and/or increase RNOA: Inventories Accounts Receivable Plant, Property, and Equipment (fixed assets) Accounts Payable List and explain ONE action you would take, for EACH operating item above, to increase RNOA and/or reduce net operating assets (NOA). In your response, you should have ONE action item for EACH operating item listed.arrow_forwardThe Elegant Software Company recently completed the development and testing of a new software program thatprovides the ability to transfer data from among a variety of operating systems. The company believes this productwill be quite successful and capitalized all of the costs of designing, developing, coding, and testing the software.These costs will be amortized over the expected useful life of the software on a straight-line basis.Required:1. Was Elegant correct in its treatment of the software development costs? Why?2. Explain the appropriate method for determining the amount of periodic amortization for any capitalized software development costsarrow_forward
- Compute returns on assets for AT&T and Verizon and answer the question below. Be sure to show your work. Key figures($ millions). AT&T Verizon Sales 126,723 110,875 Net Income 4,184 10,198 Average Assets 269,868 225,233 AT&T Verizon Which company is more successful in returning net income from its assets invested?arrow_forwardAssume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to Digitized Corp. and Very Network, Inc. and have assembled the following data. LOADING... (Click to view the income statement data.) Data Table Selected income statement data for the current year: Digitized Very Network Net Sales Revenue (all on credit) $418,290 $494,940 Cost of Goods Sold 210,000 256,000 Interest Expense 0 15,000 Net Income 62,000 70,000 (Click to view the balance sheet and market price data.) Data Table Selected balance sheet and market price data at the end of the current year: Digitized Very Network Current Assets: Cash $24,000 $21,000 Short-term Investments 42,000 19,000 Accounts Receivables, Net 36,000 46,000 Merchandise Inventory 67,000 98,000 Prepaid Expenses 22,000 18,000 Total…arrow_forwardCompare Fed Ex and UPS FedEx Corporation (FDX) and United Parcel Service, Inc. (UPS) compete in the package delivery business. The major fixed assets for each business include aircraft, sorting and handling facilities, delivery vehicles, and information technology. The sales and average book value of fixed assets reported on recent financial statements for each company were as follows: a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. b. Which company appears more efficient in using fixed assets? c. Interpret the meaning of the ratio for the more efficient company.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License