Blythe Corporation and Jacke Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe‐tracing devices.
What improvements can be made to the hiring process, even before recruitment begins?
July 22, 2019Discuss the purpose of the cash conversion cycle and its components.
July 22, 2019Blythe Corporation and Jacke Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe‐tracing devices.
Question Description
Blythe Corporation and Jacke Corporation, two companies of roughly the same size, are both involved in the manufacture of shoe‐tracing devices. Each company depreciates its plant assets using the straight‐line approach. An investigation of their financial statements reveals the information shown below.
Blythe Corp. Jacke Corp.
Net income $ 240,000 $ 300,000
Sales revenue 1,150,000 1,200,000
Total assets (average) 3,200,000 3,000,000
Plant assets (average) 2,400,000 1,800,000
Intangible assets (goodwill) 300,000 0
Instructions
(a) For each company, calculate these values:
Return on assets.
Profit margin.
Asset turnover.
(b) Based on your calculations in part (a), comment on the relative effectiveness of the two companies in using their assets to generate sales. What factors complicate your ability to compare the two companies?
Compute depreciation under different methods.
