Return on Assets: Return on Assets (ROA) is the earnings generated by the business/management on the investment or assets /invested into a business. It indicates the efficiency of the business/ management by calculating the percentage of return, the business/management gives on the investment made. The calculation is done by dividing a company's annual earning by its total assets. The return on assets is also known as return on investment . (1) To determine: For Coca-cola and Pepsico, calculate the return on assets. Answer: Computation of return on assets:Formula: ( N e t i n c o m e / t o t a l a v e r a g e a s s e t ) × 100 ( a ) R e t u r n o n a s s e t s o f C o c a − c o l a ( $ 8 , 634 / $ 76 , 448 ) × 100 = 11.29 % ( b ) R e t u r n o n a s s e t s o f P e p s i c o . ( $ 6 , 462 / $ 70 , 518 ) × 100 = 9.16 % (2) To write: Compare the sales of the two companies and find which company is more successful

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Chapter 1, Problem 11APSA

To determine

Concept introduction:

Return on Assets:

Return on Assets (ROA) is the earnings generated by the business/management on the investment or assets /invested into a business. It indicates the efficiency of the business/ management by calculating the percentage of return, the business/management gives on the investment made. The calculation is done by dividing a company's annual earning by its total assets. The return on assets is also known as return on investment.

(1) To determine:

For Coca-cola and Pepsico, calculate the return on assets.

Answer:

Computation of return on assets:Formula:

(Net income/total average asset)×100(a) Return on assets of Coca−cola($8,634/$76,448)×100 = 11.29% (b) Return on assets of Pepsico.($6,462/$70,518)×100 = 9.16%

(2) To write:

Compare the sales of the two companies and find which company is more successful

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