Problem - Danner Corporation and London Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe-tracing devices. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the information shown below.
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Danner Corp.
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London Corp.
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Net income
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$ 255,900
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$ 331,700
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Sales revenue
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1,755,800
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1,822,200
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Total assets (average)
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3,457,400
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3,227,400
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Plant assets (average)
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2,601,600
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1,896,500
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Intangible assets (goodwill)
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467,500
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0
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(a) For each company, calculate these values:
(1) Return on assets.
(2) Profit margin.
(3) Asset turnover.