Peanut Queen and Lord of ice are two competitors selling ice-cream. Below is the informationpertaining to the two businesses for the financial year ended June 30, 2021.Peanut QueenLord of IceNet Profit ($)105,000280,000Cost of Goods Sold ($)Total Assets ($)100,0001,000,000500,000800,000Total Liabilities250,000300,000Gross Profit ($)110,000600,000Lisa has capital to invest in one of the businesses. She likes peanut butter ice-cream but needs toconsider the financial performance of the two businesses to make an informed investment decision.Required:In the table below, calculate Net Profit Margin, Asset Turnover, Financial Leverage, and Return onEquity (ROE) ratios for the two businesses.Peanut QueenLord of IceNet Profit MarginAsset TurnoverFinancial LeverageROEBased on the financial performance alone, which one of the two businesses would you recommendto Lisa to invest in? Considering the components of the DuPont model, which component is drivingthe financial performance of the business you chose?Answer here:Provide one example of non-financial information Lisa could consider in addition to the ratioscalculated above when choosing between the two businesses. Briefly explain how that example ofnon-financial information could assist Lisa in her decision-making process.Answer here:

solution formula used Revenue =COGS + gross profit net profit margin =net…

tequired: n the table below, calculate Net Profit Margin, Asset Turnover, Financial Leverage, and Return quity (ROE) ratios for the two businesses. Peanut Queen Lord of Ice Net Profit Margin Asset Turnover Financial Leverage ROE

tequired: n the table below, calculate Net Profit Margin, Asset Turnover, Financial Leverage, and Return quity (ROE) ratios for the two businesses. Peanut Queen Lord of Ice Net Profit Margin Asset Turnover Financial Leverage ROE

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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