Income Ratios and Asset Turnover The following data are from the 2002, 2001, and 2000 annual reports of McDonald's Corporation. There are more than 27,000 McDonald's restaurants in 120 countries. Dollar amounts are in millions. 2002 2001 2000 Rate of return on stockholders' equity 10.0% 17.5% 21.0% EBIT-to-sales ratio Total asset turnover (Sales + Average assets) 13.2% .66 18.1% 23.4% .67 .67 Average total assets Interest expense $23,252.5 $ 374.1 $22,109.5 $ 452.4 $21,333.5 $ 429.9 Income tax expense $ 670.0 $ 693.1 $ 905.0 1. Complete the following condensed income statements for 2002 and 2000. Round to the nearest million. 2002 2000 Sales $? $? Operating expenses EBIT ? ? $? $? Interest expense ? ? Pretax income $? $? Income tax expense ? ? Net income $? $?

2. Compute the following for 2002 and 2000:

a. Return on total assets

b. Net income-to-sales ratio

c. Average stockholders' equity 3. Compare the values for 2002 with 2000.