a.
Introduction: The return on assets is a financial ratio which states that how profitably a company has employed its assets. In other words, how the company has utilized its assets to generate income.
Requirement 1
The return on assets of the company for the current year.
b.
Introduction: Comparison between similar companies in the same industry is crucial to the assessment of the company’s performance. A company’s financial ratios, when compared with the industry data, can reveal lots of valuable information which the financial statements can not reveal.
Requirement 2
The K company’s return on assets for the current year is satisfactory or not as compared to its competitor’s return on assets.
c.
Introduction: Expenses are incurred to generate revenues and thus, form an essential part of the income statement.
Requirement 3
The total expenses of the company for the current year.
d.
Introduction:
Requirement 4
Total amount of liabilities and equity in K in the current year.
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- Comparing Two Companies in the Same Industry: Chipotle and Panera Bread Refer to the financial information for Chipotle and Panera Bread reproduced at the end of this book and answer the following questions: Required What is the dollar amount of inventories that each company reports on its balance sheet at the end of the most recent year? What percentage of total assets do inventories represent for each company? What does this tell you about the nature of their business? Refer to Note 1 in Chipotles annual report. What inventory valuation method does the company use? Refer to Note 2 in Panera Breads annual report. What inventory valuation method does the company use? How do both companies deal with situations in which the market value of inventory is less than its cost? Given the nature of their businesses, which inventory system, periodic or perpetual, would you expect both Chipotle and Panera Bread to use? Explain your answer.arrow_forwardKyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is $250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. Does return on assets seem satisfactory for Kyzera given that its competitors average a 12% return onassets?arrow_forwardKyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is$250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. Required What are total expenses for Kyzera in its most recent year?arrow_forward
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