Solution to BTN chapter 1-7thEdition

# Solution to BTN chapter 1-7thEdition - Reporting in Action...

This preview shows pages 1–2. Sign up to view the full content.

Reporting in Action — BTN 1-1 1. An organization’s total assets are equal to its total liabilities plus total equity. Because Apple’s liabilities and equity total \$176,064 (in millions), this implies its amount of assets invested is the same \$176,064 (in millions). 2. Return on assets is net income divided by the average total assets invested. For Apple this return is (\$ millions): \$41,733 / [(\$176,064 + \$116,371)/2] = 0.285 or 28.5% . 3. We know that net income equals total revenues less total expenses. For Apple, we are told net income is \$41,733 and revenues are \$156,508. Thus, Apple’s total expenses are computed as: \$156,508 - Expenses = \$41,733. Total expenses must equal \$114,775 . (all \$ in millions) 4. Apple’s return on assets of 28.5% is good given that it exceeds its competitors’ return on assets of roughly 10% for this period. 5. Answer depends on the current annual report information obtained. Comparative Analysis — BTN 1-2 (\$ millions) Apple Google 1. Total assets = Liabilities + Equity \$176,064 \$93,798 2. Return on assets \$41,733 \$10,737 [(\$176,064 + \$116,371)/2] [(\$93,798 + \$72,574)/2] 28.5% 12.9% 3. Revenues-Expenses = Net income \$156,508- Expenses =\$41,733 \$50,175 - Expenses =\$10,737

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern