Presented below are condensed financial statements adapted from those of two actual companies competing as the primary players in a specialty area of the food manufacturing and distribution industry. ($ in millions, except per share amounts.) Balance Sheets Metropolitan Republic Assets $ 179.3 $ 37.1 Cash Accounts receivable (net) 422.7 325.0 Short-term investments 4.7 Inventories 466.4 635.2 Prepaid expenses and other current assets 134.6 476.7 Current assets $ 1,203.0 $ 1,478.7 Property, plant, and equipment (net) 2,608.2 2,064.6 Intangibles and other assets 210.3 464.7 Total assets $ 4,021.5 $ 4,008.0 Liabilities and Shareholders Equity Accounts payable $ 467.9 $ 691.2 Short-term notes 227.1 557.4 Accruals and other current liabilities 585.2 538.5 Current liabilities $ 1,280.2 $ 1,787.1 Long-term debt 535.6 542.3 Deferred tax liability 384.6 610.7 Other long-term liabilities 104.0 95.1 Total liabilities $ 2,304.4 $ 3,035.2 Common stock (par and additional paid-in capital) 144.9 335.0 Retained earnings 2,476.9 1,601.9 Less: treasury stock (904.7 ) (964.1 ) Total liabilities and shareholders equity $ 4,021.5 $ 4,008.0 Income Statements Net sales $ 5,698.0 $ 7,768.2 Cost of goods sold (2,909.0 ) (4,481.7 ) Gross profit $ 2,789.0 $ 3,286.5 Operating expenses (1,743.7 ) (2,539.2 ) Interest expense (56.8 ) (46.6 ) Income before taxes $ 988.5 $ 700.7 Tax expense (394.7 ) (276.1 ) Net income $ 593.8 $ 424.6 Net income per share $ 2.40 $ 6.50 Note: Because comparative statements are not provided you should use year-end balances in place of average balances as appropriate. Required: 1.1 Calculate the rate of return on assets for the following companies. (Round your answers to 1 decimal place.) 1.2 Which of the two firms had greater earnings relative to resources available? Metropolitan Republic 2.1 Calculate the return on assets for both companies. (Round your answers to the expected format presented in the table.) 2.2 Have the two companies achieved their respective rates of return on assets with similar combinations of profit margin and turnover? No Yes 3.1 Calculate the Rate of return on shareholders equity for the following companies. (Round your answers to 1 decimal place.) 3.2 From the perspective of a common shareholder, which of the two firms provided a greater rate of return? Metropolitan Republic 4.1 Calculate the equity multiplier for the following companies. (Round your answers to 2 decimal places.) 4.2 Which company is most highly leveraged and which has made most effective use of financial leverage? 5. Calculate the acid-test ratio and current ratio for the following companies. (Round your answers to 2 decimal places.) 6. Calculate the receivables and inventory turnover ratios the following companies. (Round your answers to 1 decimal places.) 7. Calculate the times interest earned ratio for the following companies. (Round your answers to 1 decimal place.)