Question
Allied Construction and Axis Construction reported the following information in their annual financial statements ($ in millions): Allied Construction 2024 2023 Sales $56,000 $42,000 Net
Allied Construction and Axis Construction reported the following information in their annual financial statements ($ in millions):
| Allied Construction | 2024 | 2023 |
|---|---|---|
| Sales | $56,000 | $42,000 |
| Net income | 3,400 | 3,500 |
| Total assets | 30,000 | 20,000 |
| Axis Construction | 2024 | 2023 |
|---|---|---|
| Sales | $88,000 | $77,000 |
| Net income | 3,400 | 4,500 |
| Total assets | 54,000 | 59,000 |
Required:
1. Calculate Allied Construction's return on assets, profit margin, and asset turnover ratio for 2024.
2. Calculate Axis Construction's return on assets, profit margin, and asset turnover ratio for 2024.
3-a. Which company has the better profit margin?
3-b. Which company has the better asset turnover?
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Contemporary Auditing
Authors: Michael C. Knapp
10th edition
978-1285066608, 128506660X, 978-1305445161, 1305445163, 978-1305970816
