9 information is provided below for two companies in thousands johnsonlyndon sales 1 4352255

9.Information is provided below for two companies:

(in thousands)JohnsonLyndon


Net income6002,700

Total stockholders' equity5,6009,000

Total assets7,00010,000


a.Compute asset turnover, profit margin, return on assets, and return on equity for each company.

b.Compare the companies' performance.

10.Windpower Corporation's management has decided to invest $8 million in production facilities with the capacity to produce 800,000 units per year. Variable expenses will be $8 per unit. Fixed expenses will be $2,400,000 per year. The firm has developed two sales scenarios for the coming year:

a.At a price of $12, below most of the competition, sales will be 700,000 units.

b.At a price of $18, sales will be 400,000 units.


Develop a schedule showing profit from both scenarios. Which would you recommend? Why?

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