Solution-Which company seems to be doing a better job

Which company seems to be doing a better job

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Reference no: EM131809678

Problem

Lennox International Inc. makes air conditioning, heating, and fireplace systems for residential and commercial uses, as well as commercial refrigeration equipment. Tecumseh Products Company manufactures air conditioning and refrigeration compressors, condensing units, heat pumps, and complete refrigeration systems. Select financial statement data and asset utilization ratios for each company follow.

Lennox International
($ in millions)	2009	2010	2011
Sales	$2,847.5	$3,096.4	$3,303.6
ROA	0.035	0.077	0.058
Current assets turnover	3.22	3.48	3.57
Fixed (long-term) assets turnover	3.97	4.26	4.27
Total assets turnover	1.78	1.91	1.94

Lennox International
($ in millions)	2009	2010	2011
Sales	$735.9	$933.8	$864.4
ROA	(0.111)	0.083	(0.101)
Current assets turnover	1.93	2.31	2.24
Fixed (long-term) assets turnover	1.84	2.59	3.13
Total assets turnover	0.94	1.22	1.30

Required:

1. Compare the asset utilization effectiveness of the two companies. Which company seems to be doing a better job?

2. How do the companies' operating profit margins compare?

Reference no: EM131809678

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Which company seems to be doing a better job

Reference no: EM131809678

Reference no: EM131809678

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