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Cullumber Limited competes in the fast food industry with Riverbed Limited. Cullumber embarked on a major expansion in 2018, borrowing a large amount of money
Cullumber Limited competes in the fast food industry with Riverbed Limited. Cullumber embarked on a major expansion in 2018, borrowing a large amount of money and acquiring a small competitor. The acquisition doubled the number of restaurants that Cullumber has. Riverbed, on the other hand, took a more conservative approach and did not buy any new assets, focusing instead on a strategy of making existing operations more efficient. Data for the two companies are provided below (in thousands of dollars): 2018 2017 2016 $2,180 2,975 $1,149 $900 1,360 1,600 322 140 140 Cullumber Total assets Net sales Net income Riverbed Total assets Net sales Net income 850 939 900 2,005 1,675 2,000 203 210 180 (a) Calculate the (1) profit margin, (2) asset turnover, and (3) return on asset ratios for each company in 2017 and 2018. (Round answers to 1 decimal place, e.g. 5.2% or 5.2.) Cullumber Riverbed 2017 2018 2017 2018 (1) Profit margin % % % % (2) Asset turnover times times times times (3) Return on assets % % % %
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