Question

Return to course Comparing Profitability and Turnover Ratios for Retail Companies Selected financial statement data for Best Buy Co., Inc., The Kroger Co., Nordstrom, Inc., Office Depot, Inc., and Walgreens Boots Alliance, Inc. is presented in the following table: man Besty r er Nordstrom Office Depot Walgreens Sales 1510 51226620 4 0 $10.2400 11.5370 Cost of 1 0 5.6620 000 7.7790 100 1050 6010 1600 620 6220 10000 1,889.0 4370 181.0 5.031.0 Averecevables 10 6430 3090 65505 A picos S065 4670 165 1.1360 2320 N 20 20435 1910 6630 1776.5 Aage 125 36.851.0 1540 95 67 0665 Note: Assume a statutory tax rate of 25% for all companies Required a. Compute return on assets (ROA) profit margin (PM) and asset turnover (AT) for each company. Assume an income tax rate of 25%. Round your answers to one decimal place. Nordstrom Office Depot Water b. Compute accounts receivable turnover (ART), inventory turnover (INVT) and property, plant and equipment turnover (PPET) for each company, Round your answers to one decimal place Nardet Omice De W algreen 20.1 p oGP for each company Round your answers to one decimal place. Nordstrom Omen Dapat Walgreen

Answer 1

ROA, PM and Asset Turnover
	Best Buy	Kroger	Nordstrom	Office Depot	Walgreens
ROA	7.99%	6.76%	3.79%	4.10%	8.43%
PM	2.55%	2.03%	3.91%	2.37%	4.30%
Asset Turnover	3.13	3.33	0.97	1.73	1.96
ART, INVT and PPET
	Best Buy	Kroger	Nordstrom	Office Depot	Walgreens
ART	35.18	74.66	89.99	12.66	20.08
INVT	6.41	14.61	5.04	6.56	10.91
PPET	17.88	5.83	3.95	15.44	9.55
Gross Profit Margin
	Best Buy	Kroger	Nordstrom	Office Depot	Walgreens
GPM	23.43%	22.01%	36.10%	24.03%	23.41%
ROA = (Net Income + Interest Expenses)*100/Average Total assets
PM = (Net Income + Interest Expenses)*100/Sales
Asset Turnover = Sales/ Average Total Assets
ART = Sales/ Average receivables
INVT = Cost of goods Sold/ Average Inventory
PPET = Sales/ Average PP&E
GPM = (Sales - COGS)*100/Sales