Calculate return on assets, Financial Accounting

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Select two of the following firms: Dole Foods, Campbell Soup, Hershey and Dr. Pepper Snapple. Use the 10-K, annual report and other information to answer the following questions. Provided below are links to the annual reports for the firms. The firms provide additional information on their websites which are typically listed under the investor relations category.

Do not use edited and altered financial statements provided by third party providers. Use annual financial statements, not quarterly financial statements. the fiscal year provided. Print out and hand in the portions of the financial statements that you use. That makes it easier to grade.

Late assignments are accepted but there is a penalty for being late.

You can continue to use the same company in subsequent parts of the project or switch firms for any given assignment. Always prominently indicate which firm or firms are used in each assignment.

You should show the math for your calculations on another page with the steps clearly labeled. Do not use the calculations made by a third party provider. sure you answer all the questions. Failure to do so will adversely affect your grade.

1) Calculate return on assets for the two firms. Identify which one has the higher ROA.

2) For the firm with the higher ROA, identify factors that contribute to the larger ROA. Make sure as part of your answer you address all of the items in 2a to 2e. You can also discuss other factors that had an important effect on which firm has the larger ROA. For example, does one firm have a large amount of intangible assets or does one firm have high levels of expenses other than cost of goods sold. A better answer will identify which ratios are particularly important in influencing the ROA differences. You should write a few paragraphs of text but the bulk of the assignment consists of calculations.

2a) Calculate the asset turnover ratio and the ROA profit margin for both firms.

2b) Calculate the cost of goods sold to revenue ratio for both firms.

2c) Indicate whether the relative size of the cost of goods sold to revenue ratio helps explain the difference in the ROA profit margin and ROA. For example, if Firm A has the lower cost of sold to revenue ratio and the higher ROA profit margin, the cost of goods sold to revenue ratio helps explain the difference in the ROA profit margin. You should do two comparisons in answering this item. Even if the differences between the ratios are small, focus on which one is larger.


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