Question

Suppose in its 2022 annual report that McDonald’s Corporation reports beginning total assets of $29.90 billion, ending total assets of $32.10 billion, net sales of $22.63 billion, and net income of $4.65 billion.

(a) Compute McDonald’s return on assets. (Round return on assets to 2 decimal places, e.g. 5.12%.)

(b) Compute McDonald’s asset turnover. (Round asset turnover to 2 decimal places, e.g. 5.12.)

Answer 1

A) Return on Assets = Net income/Average total assets

= 4.65/[(29.90+32.10)/2

= 4.65/31

= 15%

.

B) Asset turnover = Salea/Average total assets

= 22.63/31

= 0.73