Suppose in its 2017 annual report that McDonald’s Corporation reports beginning
ID: 2537396 • Letter: S
Question
Suppose in its 2017 annual report that McDonald’s Corporation reports beginning total assets of $28.15 billion, ending total assets of $30.50 billion, net sales of $22.95 billion, and net income of $4.10 billion.
(a) Compute McDonald’s return on assets. (Round return on assets to 2 decimal places, e.g. 5.12%.)
McDonald’s return on assets _________%
(b) Compute McDonald’s asset turnover. (Round asset turnover to 2 decimal places, e.g. 5.12.)
McDonald’s asset turnover _________ times
McDonald’s return on assets _________%
(b) Compute McDonald’s asset turnover. (Round asset turnover to 2 decimal places, e.g. 5.12.)
Brief Exercise 9-10 Suppose in its 2017 annual report that McDonald's Corporation reports beginning total assets of $28.15 billion, ending total assets of $30.50 billion, net sales of $22.95 billion, and net income of $4.10 billion (a) Compute McDonald's return on assets. (Round return on assets to 2 decimal places,e.g.5.12%.) McDonald's return on assets (b) Compute McDonald's asset turnover. (Round asset turnover to 2 decimal places, e.g. 5.12.) McDonald's asset turnover timesExplanation / Answer
Average total assets=(Beginning assets+Ending assets)/2
=(28.15+30.5)/2=$29.325 billion
1.ROA=Net income/Average total assets
=(4.1/29.325)=13.98%(Approx).
2.Asset turnover=Sales/Average total assets
=(22.95/29.325)=0.78 times(Approx).