Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station’s business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub’s business strategy is to sell the lowest cost sub on the planet. Sub Station Planet Sub Net sales 109,649 63,471 Net income 27,322 4,892 Total assets, beginning 76,583 41,199 Total assets, ending 119,171 47,333 Required: 1. Calculate Sub Station’s return on assets, profit margin, and asset turnover ratio. 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. 3-a. Which company has the higher profit margin? Sub Station’s Planet Sub 3-b. Which company has the higher asset turnover? Sub Station’s Planet Sub 3-c. Are the two ratios consistent with the primary business strategies of the two companies? Yes No
Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station’s business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub’s business strategy is to sell the lowest cost sub on the planet. Sub Station Planet Sub Net sales 109,649 63,471 Net income 27,322 4,892 Total assets, beginning 76,583 41,199 Total assets, ending 119,171 47,333 Required: 1. Calculate Sub Station’s return on assets, profit margin, and asset turnover ratio. 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. 3-a. Which company has the higher profit margin? Sub Station’s Planet Sub 3-b. Which company has the higher asset turnover? Sub Station’s Planet Sub 3-c. Are the two ratios consistent with the primary business strategies of the two companies? Yes No
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station’s business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub’s business strategy is to sell the lowest cost sub on the planet.
Sub Station | Planet Sub | |
Net sales | 109,649 | 63,471 |
Net income | 27,322 | 4,892 |
Total assets, beginning | 76,583 | 41,199 |
Total assets, ending | 119,171 | 47,333 |
Required:
1. Calculate Sub Station’s return on assets, profit margin, and asset turnover ratio.
2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio.
3-a. Which company has the higher profit margin?
-
Sub Station’s
-
Planet Sub
3-b. Which company has the higher asset turnover?
-
Sub Station’s
-
Planet Sub
3-c. Are the two ratios consistent with the primary business strategies of the two companies?
-
Yes
-
No
![Required:
1. Calculate Sub Station's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e.
123,000 should be entered as 123).)
Return on Assets
Choose Numerator
Choose Denominator
Return on Assets
Return on assets
+
Profit Margin
Choose Numerator
Choose Denominator
Profit Margin
%3D
Profit Margin
Asset Turnover
Choose Numerator
Choose Denominator
Asset Turnover
Asset Turnover
=
times
II
II](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc480ef23-b9e1-4ed5-80be-5a6f0613e933%2F224cd233-80a5-40c5-98f6-684b71d8852e%2Fmbn2tcr_processed.png&w=3840&q=75)
Transcribed Image Text:Required:
1. Calculate Sub Station's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e.
123,000 should be entered as 123).)
Return on Assets
Choose Numerator
Choose Denominator
Return on Assets
Return on assets
+
Profit Margin
Choose Numerator
Choose Denominator
Profit Margin
%3D
Profit Margin
Asset Turnover
Choose Numerator
Choose Denominator
Asset Turnover
Asset Turnover
=
times
II
II
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