Zoogle has the following selected data ($ in millions) : (Round your answers to 2 decimal place. Enter your answers in millions (i. e., $10,110,000 should be entered as 10.11).)

Net sales $ 23,451

Net income 6,500

Operating cash flows 9,314

Total assets, beginning 29,768

Total assets, ending 38,497

Required:

1. Calculate the return on assets. ($ in millions)

2. Calculate the cash return on assets. ($ in millions)

3. Calculate the cash flow to sales ratio and the asset turnover ratio. ($ in millions)

Answer and Explanation:

The computation is shown below:

1. The Return on assets is

Return on assets = (Net income) : (average of total assets)

where,

Net income is $6,500

Average total assets = (Beginning total assets + ending total assets) : 2

= ($29,768 + $38,497) : 2

= $34,132.50

Now put these values to the above formula

So, the return on asset is

= $6,500 : $34,132.50

= 19.04

2. Cash Return on assets is

= Operating cash flows : Average total assets

= $9,314 : $34,132.50

= 27.29%

3 Cash flow to sales ratio is

= Operating Cash Flow : Net sales

= 9,314 : $23,451

= 39.72%

And, Asset turnover ratio is

= Net sales : Average total assets

= $23,451 : $34,132.50

= 0.68 times