Question

Data from the financial statements of Nancarrow Brothers Co. and J. C. Murphy, Inc. are presented below (in millions):

	Nancarrow Brothers Co.	J. C. Murphy, Inc.
Total liabilities, 2019	$73,044	$54,196
Total liabilities, 2018	72,208	60,092
Total assets, 2019	92,372	65,744
Total assets, 2018	93,028	70,416
Net sales, 2019	322,932	163,404
Net income, 2019	2,600	4,415

To the nearest hundredth, what is the 2019 return on assets ratio for Nancarrow Brothers Co.?

Select one:

A. 6.72%

B. Not enough information provided

C. 2.81%

D. 3.56%

Answer 1

Return on assets = Net income/Average total assets = 2600 / [(92,372+93,028)/2] = 2600/92,700 = 2.81%