Acc644 Assignment #1 - Goldey-Beacom College

This study source was downloaded by 100000865965430 from CourseHero.com on 07-15-2023 04:03:50 GMT -05:00https://www.coursehero.com/file/60567233/ACC644-Assignment-1docx/ Goldey-Beacom CollegeACC644 Financial Reporting and Analysis Case #1 - (CH1-3) 1. Below are several financial statement items for fiscal year 2020 for two grocery chains, Whole Foods Market, an upscale organic grocer, and The Kroger Co. a mainstream grocer. ($ millions)($ millions) Whole FoodsMarket TheKrogerCo.Net income $ 507 $ 1,957Sales 15,724 115,337Average assets 6,041 35,201Average stockholders equity 3,497 6,754a. Calculate each companys return on assets (ROA) and return on equity (ROE). Comment on any differences you observe.Whole Foods Market:ROA = Net IncomeAverage Assets = 5076041 = 8.3926 %ROE = Net IncomeAverage Stockholde r 's Equity = 5073497 = 14.4981 %The Korger Co.ROA = Net IncomeAverage Assets = 195735201 = 5.5595 %ROE=NetIncomeAverageStockholder'sEquity=19576754=28.9754%Comments: Whole Foods has higher ROA than KorgerKroger CO. has higher ROE than Whole Foodsb. Disaggregate the ROA for each company into profit margin (PM) and asset turnover (AT). Explain why Whole Foods has a higher ROA, is it because of PM or AT or both?ROA=ProfitMarginAssetTurnoverRatio Net IncomeSales Revenue Sales RevenueAverage AssetWhole Food Market:profit margin = Net IncomeSales = 50715724 = 3.2243 %Asset Turnover Ratio = SalesAverage Asset = 157246041 = 2.60281This study source was downloaded