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Compute and Interpret ROA, Profit Margin, and Asset Turnover of Competitors Selected balance sheet and income statement infor

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Answer #1

a) ROA = Net income/Average assets

McDonalds = 5129.15/35454 = 14.5%

Yum Brands = 1105.5/8520 = 13.0%

b) Calculate following

PM * AT = ROA
McDonalds 5129.15/27441 = 18.7% 27441/35454 = 0.774 18.7*.774 = 14.5%
Yum Brands 1105.5/13279 = 8.3% 13279/8520 = 1.559 8.3*1.559 = 13.0%
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