Question

Brief Exercise 11-10 In its 2017 annual report, Campbell Soup Company reports beginning-of-the-year total assets of $7,837 million, end-of-the-year total assets of $7,726 million, total sales of $7,890 million, and net income of $887 million.

Compute Campbell’s asset turnover. (Round answer to 4 decimal places, e.g. 4.8726.)

Asset turnover

enter asset turnover in times rounded to 4 decimal places

times

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Compute Campbell’s profit margin on sales. (Round answer to 2 decimal places, e.g. 4.87%.)

Profit margin on sales

enter profit margin on sales in percentages rounded to 4 decimal places

%

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Compute Campbell’s return on assets using (1) asset turnover and profit margin and (2) net income. (Round answers to 2 decimal places, e.g. 4.87%.)

				Return on assets
(1)		Asset turnover and profit margin		enter percentages rounded to 2 decimal places	%
(2)		Net income		enter percentages rounded to 2 decimal places	%

Answer 1

Ans. 1	Assets turnover = Sales / Average assets
	$7,890 / $7,781.50
	1.0139	times
	*Average assets = (Beginning assets + Ending assets) / 2
	($7,837 + $7,726) / 2
	$7,781.50	million
Ans. 2	Profit margin = Net income / Net sales * 100
	$887 / $7,890 * 100
	11.24%	(or 0.1124)
Ans. 3 - (1)	Return on assets = Asset turnover * Profit margin
	1.0139 * 11.24%
	11.40%
Ans. 3 - (2)	Return on assets = Net income / Average assets * 100
	$887 / $7,781.50 * 100
	11.40%