Question

eBOOK Calculator Return on assets Pfizer Inc. (PFE) discovers, produces, and distributes medicines, including Celebrex and Lipitor Ford Motor Co. (F) develops, markets, and produces automobiles and trucks. Microsoft Corporation (MSFT) develops, produces, and distributes a variety of computer software and hardware products including Windows, Office, Excel, and the Xbox 1. The following data (in millions) were taken from recent financial statements of each company: Pfizer Ford Microsoft Net Income $21,308 $7,628 $21,204 Total assets at the beginning of the year 171,615 237,951 193,468 Total assets at the end of the year 171,797 257,808 241,086 Compute the return on assets for each company using the preceding data, and rank the companies' return on assets from highest to lowest. Round the return on assets to one decimal place. Return on assets Rank Pfizer 96 Ford % Microsoft 96 2. All of the following statements regarding the rate of return on asset rankings for Microsoft, Pfizer and Ford are true except: 1. Microsoft has the highest return on assets 2. Ford has the lowest return on assets. 3. Microsoft has been challenged by competitors such as Alphabet (Google). 4. Pfizer has the highest return on assets. Choose the correct answer:

Answer 1

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A B С D E F 1 2 Pfizer 3 4 Company Net Income Total assets at the beginning of the year Total assets at the end of the year Ford Microsoft 21308 7628 21204 171615 237951 193468 5 171797 257808 241086 6 7 8 Return on Assets Net Income Average total assets 9 10 11 12 Average total assets (Total assets at the beginning of the year + Total assets at the end of the year) 2 13 14 15 Average total assets Return on Assets 171706 247879.5 12.41% 3.08% 217277 9.76% 16 17 18 Requirement 1: 19 Rank 20 1 Company Pfizer Ford Microsoft Return on Assets 12.41% 3.08% 9.76% 21 3 22 2 23 24 25 Requirement 2: Option 1 is incorrect, since Pfizer has highest return on assets not microsoft So, option 1 is the answer. 26 דר KI Sheet125 Sheet123 Sheet120 Sheet121 Sheet124 Sheet126 Sheet127 Stats Ready

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A B С D E F 1 2 Pfizer 21308 Microsoft 21204 3 Company Net Income Total assets at the beginning of the year Total assets at the end of the year Ford 7628 237951 257808 4 171615 171797 193468 241086 5 6 7 8 Net Income Return on Assets Average total assets 9 10 11 12 Average total assets (Total assets at the beginning of the year + Total assets at the end of the year) 2 13 14 15 16 Average total assets Return on Assets =(D4+05)/2 =D3/D15 =(E4+E5)/2 =(F4+F5)/2 =E3/E15 =F3/F15 17 18 19 Company Rank 20 =D2 Requirement 1: Return on Assets =D16 1=E16 =F16 1 3 21 22 =E2 =F2 2 23 24 25 Requirement 2: Option 1 is incorrect, since Pfizer has highest return on assets not microsoft So, option 1 is the answer. 26 27 Sheet125 Sheet123 Sheet120 Sheet121 Sheet124 Sheet126 Sheet127 Stats Ready