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

Sales$14,000$45,000

Net income6002,700

Total stockholders' equity5,6009,000

Total assets7,00010,000

Required:

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.

Required:

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

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