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Compute ROA, Profit Margin and Asset Turnover for Competitors Selected balance sheet and income statement information from Urban Outfitters, Inc. and TJX Companies, clothing retailers
Compute ROA, Profit Margin and Asset Turnover for Competitors Selected balance sheet and income statement information from Urban Outfitters, Inc. and TJX Companies, clothing retailers in the high-end and value-priced segments, respectively, follows (in millions). 2017 2017 2017 2016 Company Sales EWI* Total Assets Total Assets Urban Outfitters $3,616 $108 $1,953 $1,903 TJX Companies 35,865 2,653 14,058 12,884 *EWI = Earnings without interest expense a. Compute the 2017 return on assets (ROA) for both companies. Round answers to one decimal place (i.e., 0.2568 = 25.7%). Urban Outfitters % TJX Companies % b. Disaggregate ROA into profit margin (PM) and asset turnover (AT) for each company. Confirm that ROA = PM XAT. Do not round until your final answers. Round PM and ROA to one decimal place (i.e., 0.2568 = 25.7%). Round AT to 3 decimal places. PM X AT = ROA Urban Outfitters % TJX Companies
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