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Shown below is the liabilities and stockholders' equity section of the balance sheet for Marigold Company and Swifty Company. Each has assets totaling $4,022,000. Marigold
Shown below is the liabilities and stockholders' equity section of the balance sheet for Marigold Company and Swifty Company. Each has assets totaling $4,022,000. Marigold Co. Current liabilities Long-term debt, 10% Common stock ($20 par) Retained earnings (Cash dividends, $232,000) $324,000 1,090,000 1,860,000 748,000 $4,022,000 SwiftyCo. Current liabilities Common stock ($20 par) Retained earnings (Cash dividends, $334,000) $194,000 3,080,000 748,000 $4,022,000 For the year, each company has earned the same income before interest and taxes. Income before interest and taxes Interest expense Marigold Co. $1,180,000 109,000 1,071,000 214,200 $856,800 Swifty Co. $1,180,000 0 1,180,000 236,000 $944,000 Income taxes (20%) Net income At year-end, the market price of Marigold's stock was $101 per share, and Swifty's was $63.50. Assume balance sheet amounts are representative for the entire year. (a) Calculate the return on total assets? (Round answers to 2 decimal places, e.g. 16.85%.) Return on total assets Marigold Company Swifty Company Which company is more profitable in terms of return on total assets
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