Question
Compute and Interpret ROA, Profit Margin, and Asset Turnover of Competitors Selected 2020 balance sheet and income statement information for Vkusno & Tochka Corporation and
Compute and Interpret ROA, Profit Margin, and Asset Turnover of Competitors Selected 2020 balance sheet and income statement information for Vkusno & Tochka Corporation and Tasty Treats, Inc., follows.
| ($ millions) | Sales Revenue | Interest Expense | Net Income | Average Total Assets |
|---|---|---|---|---|
| Vkusno & Tochka | $115,248 | $7,308 | $33,956 | $359,365 |
| Tasty Treats | 33,912 | 3,258 | 6,488 | 39,777 |
a. Compute the return on assets (ROA) for each company. Use the 25% statutory tax rate. Note: Round your answers to the nearest million dollars.
| Numerator ($ millions) | Denominator ($ millions) | = | Result | |||
|---|---|---|---|---|---|---|
| Vkusno & Tochka's ROA | Answer
| Answer
| = | |||
| Tasty Treats' ROA | Answer
| Answer
| = |
b. Disaggregate ROA into prot margin (PM) and asset turnover (AT) for each company. Note: Round your answers to the nearest million dollars.
| Numerator ($ millions) | Denominator ($ millions) | = | Result | |||
|---|---|---|---|---|---|---|
| Vkusno & Tochka's PM | Answer
| Answer
| = | |||
| Tasty Treats' PM | Answer
| Answer
| = | |||
| Vkusno & Tochka's AT | Answer
| Answer
| = | |||
| Tasty Treats' AT | Answer
| Answer
| = |
| PM | x | AT | = | ROA | |
|---|---|---|---|---|---|
| Vkusno & Tochka's ROA | x | = | |||
| Tasty Treats' ROA | x | = |
c. Discuss any dierences in these ratios for each company. AnswerVkusno & TochkaTasty Treats
has the lower ROA ratio. AnswerVkusno & TochkaTasty Treats
has the higher PM ratio. AnswerVkusno & TochkaTasty Treats
has the higher AT ratio.
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Auditing Markets Products And Marketing
Authors: David Parmerlee
1st Edition
0658001337, 978-0658001338
