Chapter 3, Problem 21QP

Profit Margin [LO4] In response to complaints about high prices, a grocery chain runs the following advertising campaign: “If you pay your child $1.50 to go buy $50 worth of groceries, then your child makes twice as much on the trip as we do.” You’ve collected the following information from the grocery chain’s financial statements:

($ in millions)
Sales	$710
Net income	10.65
Total assets	390
Total debt	280

Evaluate the grocery chain’s claim. What is the basis for the statement? Is this claim misleading? Why or why not?