The following information is provided for BioBeans and GreenKale, two companies that sell organic produce and are of similar size:- **BioBeans** - Average total assets: $195,000 - Net sales: $65,000 - Net income: $13,650- **GreenKale** - Average total assets: $154,500 - Net sales: $77,250 - Net income: $7,000### Tasks:1. **Compute the profit margin for both companies.**2. **Compute the return on total assets for both companies.**3. **Based on the analysis of these two measures, determine which company is the preferred investment.**### Instructions:Complete the questions by entering your answers in the tabs provided.#### Required 1A:- Compute the profit margin for both companies using the formula: \[ \text{Profit Margin} = \left( \frac{\text{Net Income}}{\text{Net Sales}} \right) \times 100 \]### Chart: Profit Margin CalculationThe chart provides fields to calculate the profit margin for each company:#### Profit Margin Table:- **BioBeans** - Numerator: Net Income - Denominator: Net Sales - Result: Calculate the Profit Margin Ratio- **GreenKale** - Numerator: Net Income - Denominator: Net Sales - Result: Calculate the Profit Margin RatioUse the data provided to fill in the calculations in the table.To proceed with the return on total assets calculations, select the "Required 1B" tab.

Profit margin is the net income divided by total sales Return on Assets is the net income divided average total assets Numerator Denominator Net Income Net Sales Profit Margin BioBeans $ 13,650 $ 65,000 21.00% GreenKale $ 7,000 $ 77,250 9.06% Numerator Denominator Net Income Avg Total Asset Return on Total Assets BioBeans $ 13,650 $ 1,95,000 7.00% GreenKale $ 7,000 $ 1,54,500 4.53% Bio beans is the preferred company for investment as it as a higher profit margin and return on assets.

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ts BioBeans $ 195,000 65,000 13,650 GreenKale $ 154,500 77,250 7,000 margin for both companies. n on total assets for both companies. of these two measures, which company is the preferred inves stion by entering your answers in the tabs below.

ts BioBeans $ 195,000 65,000 13,650 GreenKale $ 154,500 77,250 7,000 margin for both companies. n on total assets for both companies. of these two measures, which company is the preferred inves stion by entering your answers in the tabs below.

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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