Brief Exercise 9-10 Suppose in its 2017 annual report that McDonald\'s Corporati

Question

Brief Exercise 9-10 Suppose in its 2017 annual report that McDonald's Corporation reports beginning total assets of $29.25 billion, ending total assets of $31.20 billion, net sales of $21.50 billion, and net income of $4.00 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 15.11% (b) Compute McDonald's asset turnover. (Round asset turnover to 2 decimal places, e.g. 5.12.) McDonald's asset turnover times LINK TO TEXT INTERACTIVE TUTORIAL

Explanation / Answer

(a) Return on assets = $4.00 / [($29.25 + $31.20) / 2] = 13.23%

(b) Asset turnover = $21.50 / [($29.25 + $31.20) / 2] = 0.71 times

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