Two competitors in the construction supply industry report the following selecte

Question

Two competitors in the construction supply industry report the following selected financial data:

Calculate the cash return on assets, cash flow to sales ratio, and asset turnover ratio for each company. (Do not round intermediate calculations. Round your final answers to 2 decimal places. Omit the "%" sign in your response.)

Which company has the better cash flow to sales ratio?

Which company has the better asset turnover ratio?

Calculate the cash return on assets, cash flow to sales ratio, and asset turnover ratio for each company. (Do not round intermediate calculations. Round your final answers to 2 decimal places. Omit the "%" sign in your response.)

Which company has the better cash flow to sales ratio?

Which company has the better asset turnover ratio?

(S in millions) CompanyA Current Prior Year Year $ 46,620 $49,180 1,733 2,105 3,864 4,252 33,055 31,775 Net income Operating cash flows Total assets Company Net sales Net income Operating cash flows $65,776 $70,588 2,760 2,162 5,145 5,508 40,527 41,264 2 Total assets

Explanation / Answer

Current Year A B Cash return on assets = cash flow from operations/ average total assets. 6.0% 6.3% Cash flow to sales = cash flow from operations/ sales 8.3% 7.8% Asset turnover ratio = sales/ total assets             1.41           1.55

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