Ratio Analysis: Consolidated Financial Statements $\$$ Million -Based on the Above Preceding Table,what Are the Returns on

question 11

Multiple Choice

Ratio Analysis: Consolidated Financial Statements
$\$$ million
$\begin{array}{lrrr} & \text { Company A } & \text { Company B } & \text { Company C } \\\hline \text { Income statement } & & & 150 \\\text { Operating profit } & 120 & 100 & (20) \\\text { Interest } & 0 & 0 & 130 \\\text { Earnings before taxes } & 120 & 100 & (33) \\\text { Taxes } & (30) & (25) & (33) \\\text { net income }&90&75&98\\ \text {Operating tax rate }&25.0 \% & 25.0 \% & 25.0 \%\\ \text { Balance sheet}\\\text { Inventory } & 125 & 100 & 150 \\\text { Property, plant, and equipment } & 400 & 400 & 365\\\text { Equity investments } & 0 & 50 & 0 \\\text { Total assets } & 525 & 550 & 515\\\text { Accounts payable } & 50 & 50 & 50 \\\text { Debt } & 0 & 0 & 190\\\text { Equity } & 475 & 500 & 275 \\\text { Liabilities and equity } & 525 & 550 & 515\\\end{array}$
-Based on the above preceding table,what are the returns on assets (ROAs ) for Companiesy A,B,and C,respectively?

• A)17 percent,14 percent,19 percent.
• B)15 percent,14 percent,18 percent.
• C)11 percent,10 percent,20 percent.
• D)16 percent,13 percent,18 percent.

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Definitions:

Occipital Lobe

The region of the cerebral cortex located at the back of the brain, primarily involved in processing visual information.

Sympathetic Nervous System

The subdivision of the autonomic nervous system that mobilizes bodily resources and increases the output of energy during emotion and stress.

Epinephrine

A hormone and neurotransmitter also known as adrenaline, involved in the body's fight-or-flight response by increasing heart rate, muscle strength, and blood pressure.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting heart rate, blood pressure, and blood sugar levels.