Allied Construction and Axis Construction Reported the Following Information in Their

question 6

Essay

Allied Construction and Axis Construction reported the following information in their annual financial statements ($ in millions): $$\begin{array} { c r r } \text { Allied Construction } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } \\\text { Sales } & \$ 48,283 & \$ 46,927 \\\text { Net income } & 2,809 & 3,105 \\\text { Total assets } & 30,869 & 27,767\end{array}$$ $$\begin{array} { c r r } \text { Axis Construction } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } \\\text { Sales } & \$ 77,349 & \$ 90,837 \\\text { Net income } & 4,395 & 5,761 \\\text { Total assets } & 44,324 & 52,263\end{array}$$ Required:
1. Calculate Allied Construction's return on assets, profit margin, and asset turnover ratio for 2012.
2. Calculate Axis Construction's return on assets, profit margin, and asset turnover ratio for 2012.
3. Which company has the better profit margin and which company has the better asset turnover?

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Definitions:

Repudiation

An indication by one party to the other that there will be a failure to honour the contract (the expression of which can be expressed or implied).

Condition Breached

When a specific condition or term in a contract is violated or not fulfilled as agreed.

Damages

Financial compensation awarded by a court to a party who has suffered loss or injury due to the actions or negligence of another party.

Obligations

Duties or responsibilities imposed by law, contract, or moral imperatives, often requiring action or forbearance.