Question
Go to finance.yahoo.com to find information about Vulcan Materials Company (VMC). Southwest Airlines (LUV), Honda Motor Company (HMC), Nordstrom, Inc. (JWN), and Abbott Laboratories (ABT).
Go to finance.yahoo.com to find information about Vulcan Materials Company (VMC). Southwest Airlines (LUV), Honda Motor Company (HMC), Nordstrom, Inc. (JWN), and Abbott Laboratories (ABT). Download the most recent income statement and balance sheet for each company.
a.Calculate the operating profit margin (operating profit/sales) and the asset turnover (sales/assets) for each firms.
b.Calculate the return on assets directly (ROA 5 Operating profit/ Total assets), and then confirm it by calculating ROA 5 Operating margin 3 Asset turnover.
c.In what industries do these firms operate? Do the ratios make sense when you consider the industry types?
d.For the firms that have relatively low ROAs, does the source of the problem seem to be the operating profit margin, the asset turnover, or both?
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