Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions