Sub Station and Planet Sub reported the following selected financial data. Sub Station's business strategy is to sell the best-tasti sandwich with the highest-quality ingredients. Planet Sub's business strategy is to sell the lowest-cost sub on the planet. Net sales Net income Total assets, beginning Total assets, ending Sub Station Planet Sub $108,749 26,422 75,683 117,371 $62,571 3,992 39,399 45,533 Required: 1. Calculate Sub Station's return on assets, profit margin, and asset turnover ratio. 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio, 3-a. Which company has the more favorable profit margin? 3-b. Which company has the more favorable asset turnover? 3-c. Are the two ratios consistent with the primary business strategies of the two companies?

Sub Station and Planet Sub reported the following selected financial data. Sub Station's business strategy is to sell the best-tasti sandwich with the highest-quality ingredients. Planet Sub's business strategy is to sell the lowest-cost sub on the planet. Net sales Net income Total assets, beginning Total assets, ending Sub Station Planet Sub $108,749 26,422 75,683 117,371 $62,571 3,992 39,399 45,533 Required: 1. Calculate Sub Station's return on assets, profit margin, and asset turnover ratio. 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio, 3-a. Which company has the more favorable profit margin? 3-b. Which company has the more favorable asset turnover? 3-c. Are the two ratios consistent with the primary business strategies of the two companies?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 22E: Total cost method of product pricing Based on the data presented in Exercise 17, assume that Smart...

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! Required information [The following information applies to the questions displayed below.] Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station's business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub's business strategy is to sell the lowest cost sub on the planet. Net sales Net income Total assets, beginning Total assets, ending Choose Numerator 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).) Choose Numerator Choose Numerator ÷ = 16 ÷ + .. ÷ + Sub Station $109,049 26,722 75,983 117,971 4 Planet Sub $62,871 4,292 39,999 46,133 Return on Assets Choose Denominator Profit Margin Choose Denominator Asset Turnover Choose Denominator | 11 || Return on Assets Return on assets Profit Margin Profit Margin Asset Turnover Asset Turnover 0 times e 0
Required information [The following information applies to the questions displayed below] Sub Station and Planet Sub reported the following selected financial data (5 in thousands). Sub Station's business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub's business strategy is to sell the lowest cost sub on the planet. Net sales Net Income Total assets, beginning Total assets, ending Choose Numerator Choose Numerator Sub Station Planet Sub $63,171 4,532 43,599 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (L.e. 123,000 should be entered as 123)) Choose Numerator $109,345 23,022 76,283 118,571 Return on Assets Choose Denominator Profit Margin Choose Denominator Asset Turnover Choose Desominator Return on Assets Return on assets Profil Margis Asset Turnover Asset Tunaver 0 4
Required information Skip to question [The following information applies to the questions displayed below.] Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station's business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub's business strategy is to sell the lowest cost sub on the planet. Sub Station Planet Sub Net sales $ 110, 249 $ 64,071 Net income 27, 922 5, 492 Total assets, beginning 77, 183 42,399 Total assets, ending 120, 371 48, 533 Required: 1. Calculate Sub Station's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).)
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