In response to complaints about high prices, a grocery chain runs the following

Question

In response to complaints about high prices, a grocery chain runs the following advertising campaign: "If you pay your child $1 to go buy $30 worth of groceries, then your child makes about twice as much on the trip as we do." You've collected the following information from the grocery chain's financial statements: (millions) Sales Net income Total assets Total debt 788.00 13.15 405.00 161.00 What is the child's profit margin? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Child's profit margin What is the store's profit margin? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Store's profit margin What is the store's ROE? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) ROE

Explanation / Answer

Child's profit margin=1/30=3.33%

Store's profit margin=13.15/788=1.67%

Store's ROE=net income/equity

=net income/(total assets-total debt)

=13.15/(405-161)

=5.39%

The above should be answer..

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