Which company has shown the strongest sales growth

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Reference no: EM131826295

Problem - The Following table presents ROA calculations for 3 companies in the retail grocery industry using earnings (EBI) and balance sheet data for each company. These companies compete on price, quality of goods and service, convenience, and product mix. 7-eleven operates convenience stores and generates approximately 25% of its revenue from gasoline sales. Publix Super Markets operates retail food supermarkets in Florida, Georgia, South Carolina, Alabama, and Tennessee. Albertson's is the second largest US supermarket chain.

7-Eleven Corp.

 

Year 1

Year 2

Year 3

Year 4

Sales

$8,251,700

$9,178,711

$9,622,301

$10,109,744

Profit Margin (EBI/Sales)

1.7%

1.8%

1.4%

0.9%

Asset Turnover (Sales/Average Assets)

3.20

3.38

3.41

3.39

ROA = Margin x Asset Turnover

5.5%

6.0%

4.9%

3.1%

 

Publix Super Markets

 

Year 1

Year 2

Year 3

Year 4

Sales

$13,068,900

$14,575,031

$15,284,229

$15,930,602

Profit Margin (EBI/Sales)

3.5%

3.6%

3.5%

4.0%

Asset Turnover (Sales/Average Assets)

3.38

3.49

3.53

3.46

ROA = Margin x Asset Turnover

11.9%

12.7%

12.3%

13.8%

 

Albertson's

 

Year 1

Year 2

Year 3

Year 4

Sales

$37,478,000

$35,501,000

$36,605,000

$35,626,000

Profit Margin (EBI/Sales)

1.6%

2.7%

2.7%

3.1%

Asset Turnover (Sales/Average Assets)

2.43

2.23

2.28

2.28

ROA = Margin x Asset Turnover

3.9%

6.1%

6.3%

7.0%

Which company has shown the strongest sales growth over the past three years?

Reference no: EM131826295

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