Cola 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.)
Cola 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Cola 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.)
Expert Solution
Step 1
Return on assets :
Return on assets is a financial ratio that indicates how profitable a company is in relation to its total assets.
Formula :
Return on assets =Net Income / Average total assets
Where,
Average total assets = (total assets, beginning + total assets, ending) / 2
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