Problem 9-07A a
Pronghorn Corporation and Monty 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.
Pronghorn
Corp.
Monty Corp.
Net income
$ 256,440
$ 322,320
Sales revenue
1,602,750
1,611,600
Total assets (average)
5,342,500
4,029,000
Plant assets (average)
2,430,000
1,829,000
Intangible assets (goodwill)
459,100
0
(a)
For each company, calculate these values: (Round return on assets and profit margin to 1 decimal place, e.g. 6.2% and asset turnover to 2 decimal places, e.g. 17.54.)
Monty Corp.
Pronghom Corp.
(1) Return on assets
%
%
(2) Profit margin
%
%
(3) Asset turnover
times
times