Return on total Assets: The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows: R e t u r n o n a s s e t s = N e t i n c o m e A v e r a g e T o t a l A s s e t s Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows: A v e r a g e t o t a l A s s e t s = ( B e g i n n i n g t o t a l a s s e t s + E n d i n g t o t a l a s s e t s ) 2 Profit Margin Ratio: Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows: P r o f i t M a r g i n = O p e r a t i n g I n c o m e S a l e s Requirement-1: To Calculate: The return on total assets of Apple and Google for the most recent two years

Question

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Answer 1

Question

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

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Newton Company prepared the following sales budget: Month Budgeted Sales July $8,400 August $10,500 September $12,600 October $9,800 The expected gross profit rate is 35% and the inventory at the end of June was $6,500. Desired inventory levels at the end of each month are 25% of the next month's cost of goods sold. What is the budgeted ending inventory for September in dollars?

Please provide the accurate answer to this general accounting problem using appropriate methods.

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Answer 2

Question

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

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Answer 3

Question

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

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Answer 4

Question

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

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Answer 5

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

Answer 6

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

Answer 7

Chapter 15, Problem 2AA

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-1:

To Calculate:

The return on total assets of Apple and Google for the most recent two years

Answer 8

Expert Solution

Answer to Problem 2AA

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior

Return on Total Assets	13.9%	14.9%	6.9%	12.4%

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
$ Millions	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478

Beginning Total Assets (B)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (C)	$375,319	$321,686	$197,295	$167,497

Average Total Assets (D) = (B+C)/2 =	$348,503	$306,016	$182,396	$157,479

Return on Total Assets =(A/D) =	13.9%	14.9%	6.9%	12.4%

Answer 13

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

Answer 14

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Requirement-2:

To Identify:

The Company that has better return on total assets for the Current year

Answer 15

Expert Solution

Answer to Problem 2AA

Apple has the higher return on total assets for the current year.

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The returns on total assets of Apple and Google for the most recent two years are as follows:

	Apple	Google
	Current Year	Current Year

Return on Total Assets	13.9%	6.9%

Hence, Apple has the higher return on total assets for the current year.

Answer 20

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

Answer 21

To determine

Concept Introduction:

Return on total Assets:

The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in the business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows:
Return on assets = Net incomeAverage Total Assets

Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows:
Average total Assets = (Beginning total assets + Ending total assets)2

Profit Margin Ratio:

Profit Margin Ratio is a profitability ratio that represents the percentage income earned on the sales. It is calculated by dividing the Net Income by the Sales. The formulas to calculate the Profit margin is as follows:

Profit Margin = Operating IncomeSales

Asset Turnover Ratio:

Asset Turnover Ratio is an efficiency ratio that represents the sales earned on the average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Asset Turnover Ratio is as follows:

Asset Turnover Ratio = SalesAverage total assets

Requirement-3:

To Calculate:

The Profit margin and Asset turnover for Apple and Google for the most recent two years

Answer 22

Expert Solution

Answer to Problem 2AA

The Profit margin and Asset turnover for Apple and Google for the most recent two years are as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Profit Margin	21.1%	21.2%	11.4%	21.6%
Asset Turnover Ratio	0.6578	0.7047	0.6078	0.5732

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

The Profit margin and Asset turnover for Apple and Google for the most recent two years are calculated as follows:

	Apple		Google
	Current Year	1 Year Prior	Current Year	1 Year Prior
Net Income (A)	$ 48,351	$45,687	$ 12,662	$19,478
Net Sales (B)	$229,234	$215,639	$110,855	$90,272
Profit Margin (C) = A/B =	21.1%	21.2%	11.4%	21.6%
Beginning Total Assets (D)	$321,686	$290,345	$167,497	$147,461
Ending Total Assets (E)	$375,319	$321,686	$197,295	$167,497
Average Total Assets (F) = (D+E) /2 =	$348,503	$306,016	$182,396	$157,479
Asset Turnover Ratio (G) = B/F=	0.6578	0.7047	0.6078	0.5732

Answer 27

Ch. 15 - Prob. 1DQ Ch. 15 - Prob. 2DQ Ch. 15 - Prob. 3DQ Ch. 15 - Prob. 4DQ Ch. 15 - Prob. 5DQ Ch. 15 - Prob. 6DQ Ch. 15 - Prob. 7DQ Ch. 15 - Prob. 8DQ Ch. 15 - Prob. 9DQ Ch. 15 - Prob. 10DQ

Answer to Problem 2AA

Explanation of Solution

Answer to Problem 2AA

Explanation of Solution

Answer to Problem 2AA

Explanation of Solution

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