EXERCISE 81 Return on net operating assets is a function of both profit margin and net operating
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EXERCISE 8–1 Return on net operating assets is a function of both profit margin and net operating asset turnover.
Required:
How do you believe that knowledge of operating profit margin and operating asset turnover would contribute to analysis of the reported return on net operating assets for the following companies
(that is, if the business reported high return on net operating assets, is it more likely that operating profit margin is especially high or that operating asset turnover is especially high or both)? Make your assessments relative to industry norms.
a. BMW
d. Target
f. McDonald’s
b. Ford
e. Wal-Mart g. Amazon.com
c. Sak’s Fifth Avenue
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