question archive Sub Station and Planet Sub reported the following selected financial data ($ in thousands)
Subject:AccountingPrice: Bought3
Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station’s business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub’s business strategy is to sell the lowest cost sub on the planet.
Sub Station | Planet Sub | |||||||||||||
Net sales | $ 110,249 | $ 64,071 | ||||||||||||
Net income | 27,922 | 5,492 | ||||||||||||
Total assets, beginning | 77,183 | 42,399 | ||||||||||||
Total assets, ending | 120,371 | 48,533 | ||||||||||||
1. Calculate Sub Station’s return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).) 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).) 3-a. Which company has the higher profit margin?
3-b. Which company has the higher asset turnover?
3-c. Are the two ratios consistent with the primary business strategies of the two companies?
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