Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ivanhoe Limited competes in the fast food industry with Sarasota Limited. Ivanhoe underwent a major expansion in 2021, borrowing a large amount of money and

Ivanhoe Limited competes in the fast food industry with Sarasota Limited. Ivanhoe underwent a major expansion in 2021, borrowing a large amount of money and acquiring a small competitor. The acquisition doubled the number of restaurants that Ivanhoe has. Sarasota, on the other hand, took a more conservative approach and did not buy any new assets, focusing instead on making existing operations more efficient. Data for the two companies are provided below (in thousands of dollars):

2021 2020 2019
Ivanhoe
Total assets $1,830 $1,107 $990
Sales 3,224 1,540 1,600
Net income 358 146 140
Sarasota
Total assets 768 954 990
Sales 1,810 1,663 2,000
Net income 168 197 210

(a) Calculate the (1) profit margin, (2) asset turnover, and (3) return on asset ratios for each company in 2020 and 2021. (Round answers to 1 decimal place, e.g. 5.2% or 5.2.)

Ivanhoe Sarasota
2020 2021 2020 2021
(1) Profit margin % % % %
(2) Asset turnover times times times times
(3) Return on assets % % % %

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

Using Equity Audits To Create Equitable And Excellent Schools

Authors: Linda E. Skrla, Kathryn B. McKenzie, James Joseph Scheurich

1st Edition

1412939321, 978-1412939324

More Books

Students also viewed these Accounting questions