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18 September, 07:04

Suppose in its 2022 annual report that McDonald's Corporation reports beginning total assets of $29.50 billion, ending total assets of $31.50 billion, net sales of $22.57 billion, and net income of $4.27 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.

Enter McDonald's return on assets in percentages rounded to 2 decimal places.

(b) Compute McDonald's asset turnover. (Round asset turnover to 2 decimal places, e. g. 5.12.) McDonald's asset turnover.

Enter McDonald's asset turnover rounded to 2 decimal places.

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  1. 18 September, 07:12
    0
    a. 14%

    b. 0.74 times

    Explanation:

    a. The computation of the return on assets is shown below:

    = Net income : average total assets

    where,

    net income is $4.27 billion

    and, the average total assets

    = (beginning total assets + ending total assets) : 2

    = ($29.50 + $31.50) : 2

    = $30.5 billion

    Now put these values to the above formula

    So, the ratio would equal to

    = $4.27 : $30.5

    = 14.00%

    b. The computation of the assets turnover is shown below:

    = Net sales : average total assets

    where,

    net income is $22.57 billion

    and, the average total assets

    = (beginning total assets + ending total assets) : 2

    = ($29.50 + $31.50) : 2

    = $30.5 billion

    Now put these values to the above formula

    So, the ratio would equal to

    = $22.57 : $30.5

    = 0.74 times
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