Question

Bridgeport Corporation and Flint Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe-tracing devices. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the information shown below.

		Bridgeport Corp.		Flint Corp.
Net income		$ 257,280		$ 320,880
Sales revenue		1,715,200		2,005,500
Total assets (average)		4,288,000		4,011,000
Plant assets (average)		2,730,000		1,858,000
Intangible assets (goodwill)		321,100		0

(a)

For each company, calculate these values: (Round return on assets and profit margin to 1 decimal place, e.g. 6.2% and asset turnover to 2 decimal places, e.g. 17.54.)

				Bridgeport Corp.			Flint Corp.
(1)		Return on assets		enter the return on assets for Bridgeport Corp in percentages rounded to 2 decimal places	%		enter the return on assets for Flint Corp in percentages rounded to 2 decimal places	%
(2)		Profit margin		enter the profit margin for Bridgeport Corp in percentages rounded to 2 decimal places	%		enter the profit margin for Flint Corp in percentages rounded to 2 decimal places	%
(3)		Asset turnover		enter the asset turnover for Bridgeport Corp rounded to 2 decimal places	times		enter the asset turnover for Flint Corp rounded to 2 decimal places	times

Answer 1

Return on assets = Net income / Total assets Profit margin = Net income / Sales Asset turnover = Sales/ Total assets Answer: Retun on assetss Profit margin Asset turnover Bridgeport Corp. Flint Corp. 6.0% 8.0% 15.0% 16.0% 0.40 0.50