Suppose in its 2022 annual report that McDonald's Corporation reports beginning total assets of $29.00 billion

Suppose in its 2022 annual report that McDonald's Corporation reports beginning total assets of $29.00 billion, ending total assets of $30,00 billion, net sales of $20.65 billion, and net income of $4.13 billion.

(a) Compute McDonald's return on assets. (Round return on assets to 2 decimal places, es 5.12%)

McDonald's return on assets _______ %

(b) Compute McDonald's asset turnover (Round asset turnover to 2 decimal places, eg, 5.12.) \

McDonald's asset turnover _______ times

Expert Solution

1 Return on assets = (net income / total assets) × 100

Total assets (ending) = $30 billions

Net profit = $4.13 billions

Return on assets = (4.13 / 30) × 100 = 13.77%

2 Average total assets = (29 + 30) / 2 = $29.5 billions

Assets turnover = net sales / average total assets

Average total assets is used

Assets turnover = 20.65 / 29.5 = 0.7 times

0.7 is assets turnover in 2022

ekkarill92 answered 2 years ago

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