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Refer to the nancial information for TeaSea Corporation ( the Company ) below.Discuss any di erences across these three companies in the turnover ratios computed
Refer to the nancial information for TeaSea Corporation the Company below.Discuss any dierences across these three companies in the turnover ratios computed in a and b
Answer
has the lowest asset turnover of the three companies and Answer
VIO Health Corporation
has the highest asset turnover of the three companies.
Answer
The Duncan & Franklin Company
collects on receivables from their customers the most quickly.
Answer
carries the smallest amount of inventory relative to its cost of sales.
Answer
turns its inventory the slowest.
Answer
is the most capital intensive relative to its sales levels.
$ millions February February
Assets
Cash and cash equivalents $ $
Inventory
Other current assets
Total current assets
Property and equipment, net
Operating lease assets
Other noncurrent assets
Total assets $ $
Liabilities and shareholders investment
Accounts payable $ $
Accrued and other current liabilities
Current portion of longterm debt and other borrowings
Total current liabilities
Longterm debt and other borrowings
Noncurrent operating lease liabilities
Deferred income taxes
Other noncurrent liabilities
Total noncurrent liabilities
Total shareholders investment
Total liabilities and shareholders investment $ $
Fiscal Year Ended
$ millions February
Sales $
Cost of sales
Selling, general, and administrative expenses
Depreciation and amortization exclusive of depreciation included in cost of sales
Operating income
Net interest expense
Net other incomeexpense
Earnings from continuing operations before income taxes
Provision for income taxes
Net earnings from continuing operations
Discontinued operations, net of tax
Net earnings $
a Compute its return on assets ROA for the scal year ending February Compute two ROA measures: one using net earnings from continuing operations and one using net earnings. Assume a statutory tax rate of
Note: Round your answers to the nearest million dollars.
Numerator $ millions: Denominator $ millions Result
ROA from continuing operations Answer
: Answer
ROA from net earnings Answer
: Answer
b Disaggregate ROA into prot margin PM and asset turnover AT Conrm that ROA PM times AT
Note: Round your answers to the nearest million dollars.
Numerator $ millions: Denominator $ millions Result
PM from continuing operations Answer
: Answer
AT from continuing operations Answer
: Answer
PM from net earnings Answer
: Answer
AT from net earnings Answer
: Answer
PM x AT ROA
ROA from continuing operations
x
ROA from net earnings
x
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