The Second Cup Limited and Starbucks Corporation reported the following information in 2012:

                                      

Industry averages were as follows: profit margin, 7.7%; asset turnover, 1.1 times; and return on assets, 8.4%.
Instructions
(a) For each company, calculate the (1) profit margin, (2) asset turnover, and (3) return on assets ratios for 2012.
(b) Second Cup reported an impairment loss for goodwill and trademarks of $15.3 million on its 2012 income statement. Had this impairment loss not occurred, it would have reported a profit of $5.9 million and total assets, 2012, of $104 million. Recalculate the profit margin, asset turnover and return on assets ratios for Second Cup, assuming there was no impairment loss. Starbucks did not report any impairment losses in 2012.
(c) Which ratios—those calculated for Second Cup in part (a) or in part (b)—should be used for comparison with Starbucks? Using your chosen ratios, comment on how effectively each company is using its assets to generate sales and produce profit.