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Part B: (1.54+2=8 points ) For both companies for Year 2, compute the: (a) Profit margin ratio (b) Return on total assets Which company do
Part B: (1.54+2=8 points ) For both companies for Year 2, compute the: (a) Profit margin ratio (b) Return on total assets Which company do you consider having better profitability ratios? Explain. Consolidated Statement of Income December 31, Year 2 (in millions) Revenues Cost of sales Gross profit Operating expenses Opearting income Interest expense Other revenues and expenses Income before tax Income taxes Income before efect of accounting change Cumulative effect of accounting change, net of tax Net Income 106976313.64383.43137.61245.842.979.91123382.9740.1266.1474 McDonald's Consolidated Blance Sheets (in millions) December 31, Year 2 December 31, Year 1 Assets McDonald's Consolidated statement of Income December 31, Year 2 (in millions) Revenues Cost of sales Gross profit Operating expenses Operating income Interest expense Other revenues and expenses Income before tax Income taxes Net income 133.587.346.237.38.90.10.39.13.95.2
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