View the step-by-step solution to:

Two of the largest chains of grocery stores in the U. are Albertson's, Inc. and A & P.

Two of the largest chains of grocery stores in the U.S. are Albertson's, Inc. and A & P. In a recent fiscal year, Albertson's had a net income of $765 million, and A & P had a net income of $14 million. It is difficult to judge which company is more profitable from those figures alone because they do not take into account the relative sales, sizes, and investments of the companies. Data (in millions) needed to complete a financial analysis of the two companies follow.
                                                                    
                            Albertson's            A & P
Net sales                     $36,762              $10,151
                                                                                                                                  
Beginning total assets         15,719               3,335
Ending total assets            16,079               3,309
Beginning total liabilities    10,017               2,489
Ending total liabilities       10,394               2,512
Beginning stockholders equity   5,702                 846
Ending stockholders' equity     5,684                 797                                                              
Please determine which company was more profitable by computing profit margin, asset turnover, return on assets, debt to equity ratio, and return on equity for the two companies. Comment on the relative profitability of the two companies.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question