Extreme Sports Company and All Sports Corporation Below is financial information
ID: 2558730 • Letter: E
Question
Extreme Sports Company and All Sports Corporation Below is financial information for two sporting goods retailers. Extreme Sports Company operates a retail business and franchising business. At the end 2011 Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores. Extreme's stores are located in suburban, strip mall and regional mall locations, the company operates in 32 states. All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores. Selected Data for All Sports and Extreme Sports (amounts in millions) All Sports 5,320 3,897 138 212 998 1,163 2,472 Extreme Sports $1,344 887 43 Sales Cost of Goods Sold Interest Expense Net Income Average Inventory Average Fixed Assets Average Total Assets Average Tax Rate 286 130 662 40% Refer to the information for Extreme Sports Company and All Sports Corporation. What is the return on assets for All Sports? o 11.9% O 10.8% ? 9.2%Explanation / Answer
Return on asset for All Sports is 8.6%
Return on Assets = [ Net Income / Average Total Assets ] * 100
= [ $212 / $2472 ] * 100
= 8.6%
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