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Comparative financial statement data for Cool Brewery Company and Northern Beer Company, two competitors, follow:
Comparative financial statement data for Cool Brewery Company and Northern Beer Company, two competitors, follow:Northern Beer Company$40,500Cost of goods sold 100,500 15,300Operating expenses 85,400 17,190Interest expense 7,800 370Income tax expense 4,700 1,130Current assets 98,000 12,700Long-term assets (net) 210,000 29,100Current liabilities 71,900 3,900Long-term liabilities 103,900 8,000Share capital 51,200 17,800Retained earnings 81,000 12,100a) Calculate the return on assets.For the ROA, break both of them down into their two component ratios and prove they equal the returns calculated above.b) Identify two main reasons for the difference in their profitabilityc) Calculate the return on equity for both companies using the calculation in its simplest form and prove your result using the Dupont entity calculation.
