Problem 2 (15%) Publix and Kroger are two popular supermarket chains in the U.S. Publix, based in Florida offers a more upscale shopping experience than does Kroger, which is based in Cincinnati. Identical grocery items for sale in each store would cost the consumer somewhat more if purchased at Publix. A. Based solely on the information provided above, which supermarket would you expect to: earn the higher profit margin? achieve the higher asset turnover? B. Data for 2019, in $millions, were as follows: Net income Net sales Average Total Assets Publix 3,010 37,625 21,500 Kroger 1,512 126,000 42,000 In the spaces below, calculate the following: PUBLIX Profit Margin Asset Turnover KROGER Profit Margin Asset Turnover Numerator Denominator Answer times % times C. A friend examines your findings in (B) and notes that "it's apparent that PUBLIX was much more successful at managing the trade-off between profit margin and asset turnover." Calculate a very relevant ratio that will confirm that your friend's comment is accurate. Ratio Name: PUBLIX KROGER Numerator Denominator Answer D. Suggest two business practices that PUBLIX might have initiated that allowed it to more successfully manage the tradeoff between profit margin and asset turnover. 1. 2. 4 Problem 2 (15%) Publix and Kroger are two popular supermarket chains in the U.S. Publix, based in Florida offers a more upscale shopping experience than does Kroger, which is based in Cincinnati. Identical grocery items for sale in each store would cost the consumer somewhat more if purchased at Publix. A. Based solely on the information provided above, which supermarket would you expect to: earn the higher profit margin? achieve the higher asset turnover? B. Data for 2019, in $millions, were as follows: Net income Net sales Average Total Assets Publix 3,010 37,625 21,500 Kroger 1,512 126,000 42,000 In the spaces below, calculate the following: PUBLIX Profit Margin Asset Turnover KROGER Profit Margin Asset Turnover Numerator Denominator Answer times % times C. A friend examines your findings in (B) and notes that "it's apparent that PUBLIX was much more successful at managing the trade-off between profit margin and asset turnover." Calculate a very relevant ratio that will confirm that your friend's comment is accurate. Ratio Name: PUBLIX KROGER Numerator Denominator Answer D. Suggest two business practices that PUBLIX might have initiated that allowed it to more successfully manage the tradeoff between profit margin and asset turnover. 1. 2. 4