Required: 1. Calculate the return on assets for both companies. 2. Calculate the cash return on assets for both companies. 3. Calculate the cash flow to sales ratio and the asset turnover ratio for both companies. 4. Which company has the more favorable ratios?
Required: 1. Calculate the return on assets for both companies. 2. Calculate the cash return on assets for both companies. 3. Calculate the cash flow to sales ratio and the asset turnover ratio for both companies. 4. Which company has the more favorable ratios?
Chapter16: Statement Of Cash Flows
Section: Chapter Questions
Problem 2TP: Use a spreadsheet and the following financial information from Mineola Companys financial statements...
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Question
![International Genetic Technologies (InGen) and The Resources Development Association (RDA) are companies involved in cutting-
edge genetics research. Selected financial data for (InGen) and (RDA) are provided below:
($ in millions)
Net sales
Net income
Operating cash flows
Total assets, beginning
Total assets, ending
InGen
$127,245
7,074
12,639
124,503
129,517
RDA
$106,916
15,855
19,846
113,452
116,433
Required:
1. Calculate the return on assets for both companies.
2. Calculate the cash return on assets for both companies.
3. Calculate the cash flow to sales ratio and the asset turnover ratio for both companies.
4. Which company has the more favorable ratios?
(For all requirements, round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered
as 10.1).)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa67304b1-3709-41d7-a763-4eb6f13a6e63%2F9f2f68e7-9d5d-497f-abc5-d0490b000a34%2F8hdhny6_processed.png&w=3840&q=75)
Transcribed Image Text:International Genetic Technologies (InGen) and The Resources Development Association (RDA) are companies involved in cutting-
edge genetics research. Selected financial data for (InGen) and (RDA) are provided below:
($ in millions)
Net sales
Net income
Operating cash flows
Total assets, beginning
Total assets, ending
InGen
$127,245
7,074
12,639
124,503
129,517
RDA
$106,916
15,855
19,846
113,452
116,433
Required:
1. Calculate the return on assets for both companies.
2. Calculate the cash return on assets for both companies.
3. Calculate the cash flow to sales ratio and the asset turnover ratio for both companies.
4. Which company has the more favorable ratios?
(For all requirements, round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered
as 10.1).)
![Required 1 Required 2 Required 3 Required 4
Calculate the cash flow to sales ratio and the asset turnover ratio for both companies.
($ in millions)
Cash Flow to Sales
InGen
RDA
InGen
RDA
Numerator/Denominator
Operating cash flows
Net sales
Operating cash flows
Net sales
Asset Turnover
Numerator/Denominator
Net sales
Average total assets
Net sales
Average total assets
< Required 2
=
=
=
$
$
$
$
$
$
$
$
Amounts
12,639.0
127,245.0
19,846.0
106,916.0
Amounts
127,245.0
124,503.0
106,916.0
113,452.0
Required 4
>
9.9%
18.6%
1.0 times
0.9 times](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa67304b1-3709-41d7-a763-4eb6f13a6e63%2F9f2f68e7-9d5d-497f-abc5-d0490b000a34%2F1h990m9_processed.png&w=3840&q=75)
Transcribed Image Text:Required 1 Required 2 Required 3 Required 4
Calculate the cash flow to sales ratio and the asset turnover ratio for both companies.
($ in millions)
Cash Flow to Sales
InGen
RDA
InGen
RDA
Numerator/Denominator
Operating cash flows
Net sales
Operating cash flows
Net sales
Asset Turnover
Numerator/Denominator
Net sales
Average total assets
Net sales
Average total assets
< Required 2
=
=
=
$
$
$
$
$
$
$
$
Amounts
12,639.0
127,245.0
19,846.0
106,916.0
Amounts
127,245.0
124,503.0
106,916.0
113,452.0
Required 4
>
9.9%
18.6%
1.0 times
0.9 times
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