Calculate the return on assets and asset turnover

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Problem - Danner Corporation and London Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe-tracing devices. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the information shown below.


Danner Corp.

London Corp.

Net income

$ 255,900

$ 331,700

Sales revenue

1,755,800

1,822,200

Total assets (average)

3,457,400

3,227,400

Plant assets (average)

2,601,600

1,896,500

Intangible assets (goodwill)

467,500

0

(a) For each company, calculate these values:

(1) Return on assets.

(2) Profit margin.

(3) Asset turnover.

Reference no: EM132063794

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