21. Below is financial information for two restaurant retailers. Poppers Company operates an innovative retail bakery-caf business and franchising business. At the end of 2010, Poppers had 132 company owned and 346 franchise-operated bakery cafes. Poppers located most of their unique bakery-caf concept stores in suburban, strip mall, and regional mall locations. As a first mover in this concept, the company operates in 32 states. Simmer Corporation began operations five years earlier than Poppers and purchases and roasts whole bean coffees and sells them, along with numerous coffee drinks and related products at over 2,900 Company operated retail stores.

Selected Data for Poppers Company and Simmer Corporation (amounts in millions)

Required:

a. Compute the inventory turnover, fixed asset turnover, and accounts receivable turnover.

b. Describe the likely reasons for the difference in the accounts receivable turnover and the inventory turnover.

22. Lindas Clothing is a retailer of contemporary womens clothing. Selected financial information for Lindas appears below:

Required:

a. Compute the rate of return on assets for the years 2009-2011. Lindas has an effective tax rate of 35%.

b. Compute the rate of return on common shareholders equity for the years 2009-2011.

c. Compute the basic earnings per share for the years 2009-2011. d. Interpret the changes in ROA versus ROCE and EPS over the three-year period.