Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sales revenue - 2 0 2 0 $ 7 3 6 , 2 2 6 $ 3 8 2 , 3 1 7 Interest expense

Sales revenue-2020$736,226$382,317Interest expense20207.2681,598Net income-202017,9801,060Total assets2020632,135238,848Total assets-2019556,123168,995Stockholders' equity2020174,25352,840Stockholders' equity2019160,42560,380Numerator ($ millions)+ Denominator ($ millions)=ResultVIO Health ROA17,980 x17.980100%Genesis Union ROAS.1,0601.060 k100%Selected balance sheet and income statement information for the drug retailers VIC Health Corporation and Genesis Union follows. Assume a statutory tax rate of 25%.a. Compute the 2020 return on assets (ROA) for each company. Note: Enter your answers rounded to one digit after the decimal.b. Disaggregate ROA into profit margin (PM) and asset turnover (AT) for each company. Note: Enter your answers rounded to one digit after the decimal.Numerator ($ millions)Denominator (S millions)=ResultVIO Health PMGenesis Union PMVIO Health ATGenesis Union AT%%PMXATROAVIO Health ROAGenesis Union ROA%0%0%c. Compute the 2020 return on equity (ROE) and return on financial leverage (ROFL) for each company. Note: Enter your answers rounded to one digit after the decimal.Numerator ($ millions)Denominator ($ millions)-ResultVIO Health ROEGenesis Union ROE%0 Note: Enter your answers rounded to two digits after the decimal.ROFLVIO Health ROFLGenesis Union ROFL0%0%0%0960%0%d. Discuss any differences in these ratios for each company, Identify the factors) that drives the differences in ROA observed from your analyses in parts. Answer all the ones with an x
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Intermediate Accounting Reporting and Analysis

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

2nd edition

9781305727557, 1285453824, 9781337116619, 130572755X, 978-1285453828

Students also viewed these Accounting questions