a.
Introduction: The return on assets is a financial ratio which states that how profitably a company has employed its assets. In other words, how the company has utilized its assets to generate income.
Requirement 1
The return on assets of the company for the current year.
b.
Introduction: Comparison between similar companies in the same industry is crucial to the assessment of the company’s performance. A company’s financial ratios, when compared with the industry data, can reveal lots of valuable information which the financial statements can not reveal.
Requirement 2
The K company’s return on assets for the current year is satisfactory or not as compared to its competitor’s return on assets.
c.
Introduction: Expenses are incurred to generate revenues and thus, form an essential part of the income statement.
Requirement 3
The total expenses of the company for the current year.
d.
Introduction:
Requirement 4
Total amount of liabilities and equity in K in the current year.
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Chapter 1 Solutions
FINANCIAL+MANAG.ACCT.
- Barry's BBQ had sales revenue for the year of $400 million and net income of $30 million. Total assets were $50 million at the beginning of the year, and $60 million at the end of the year. Required: Calculate the following ratios: (Do not round intermediate calculations. Round your answers to one decimal place.) 1. Return on assets ratio 2. Profit margin ratio 3. Asset turnover ratio Return on assets Profit margin Asset turnover % timesarrow_forwardPeyton's Palace Peyton's Palace has net income of $13.5 million on sales revenue of $115 million. Total assets were $81 million at the beginning of the year and $89 million at the end of the year. Peyton's Palace Calculate Peyton's return on assets, profit margin, and asset turnover ratios. (Enter your answers in millions. (i.e., $5,500,000 should be entered as 5.5).) Peyton's Palace Return on Assets Numerator/Denominator Profit Margin Numerator/Denominator Asset Turnover Numerator/Denominator Prev BERAI 0 11 7 of 8 Amounts Amounts Amounts || II Next > ▪▪▪▪▪▪▪▪▪ % Help % Save & Exit Submit times Check my work of so 5 9:44 PM 5/9/2023arrow_forwardIn a recent year’s financial statements, Home Depot reported the following results. Compute and interpret Home Depot’s return on assets (assume competitors average an 11.0% return on assets). Sales $95 billion Net income . . . . . . . . . . . . $8 billion Average total assets . $42 billionarrow_forward
- Barry's BBQ had sales revenue for the year of $450 million and net income of $75 million. Total assets were $70 million at the beginning of the year, and $80 million at the end of the year.Calculate Barry's return on assets, profit margin, and asset turnover ratios. (Do not round intermediate calculations. Round your answers to 1 decimal place.) Return on assets % Profit margin % Asset turnover timesarrow_forwardDogarrow_forwardQuestionarrow_forward
- Peyton's Palace has net income of $13.4 million on sales revenue of $114 million. Total assets were $80 million at the beginning of the year and $88 million at the end of the year. Calculate Peyton's return on assets, profit margin, and asset turnover ratios. (Enter your answers in millions. (i.e., $5,500,000 should be entered as 5.5).) Return on Assets Numerator/Denominator Amounts Peyton's Palace % Profit Margin Numerator/Denominator Amounts Peyton's Palace % Asset Turnover Numerator/Denominator Amounts Peyton's Palace timesarrow_forwardSwiss Group reports net income of $34,000 for the year. At the beginning of the year, Swiss Group had $165,000 in assets. By the end of the year, assets had grown to $215,000. What is Swiss Group’s return on assets for the current year? Did Swiss Group perform better or worse than its competitors if competitors average an 13% return on assets?arrow_forwardPlease solve the question sub-division b alone.arrow_forward
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