Question

Sarasota Corporation and Marigold 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.

		Sarasota Corp.		Marigold Corp.
Net income		$ 246,750		$ 331,500
Sales revenue		2,056,250		2,210,000
Total assets (average)		4,112,500		3,453,125
Plant assets (average)		2,840,000		1,874,000
Intangible assets (goodwill)		365,100		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.)

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

Answer 1

Solution 1) - Return on asset = (Sarasota Corp) Net Income net 246750 - Foto = Total assets 4112500 6% 331500 (marigold corp) - !! = 9.6 3453125 2) - Profit Margin (sarasota coep) Net Income noe hecame = 246350 = 12% 246.750 salez 2056250 - = 12% (masigold comp) = L = - 150% 331500 2210000 Asset turnover sales 2056250 - 4112500 = 0.50 times (Sarasota Coep) Total assets (marigold corp) = " 2210006 - 3453125 - 0.64 timez