Information about two video game companies was recently taken from te companies' annual reports. Virtual...
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Accounting
Information about two video game companies was recently taken from te companies' annual reports. Virtual Videos and Games Galore both have an income tax rate of 34% and the following is the information collected from the two stores (amounts in thousands):
Virtual Videos Games Galore
Sales $15,134 $20,143
Interest Expense 80 150
Net Income 524 982
Average total assets 3,048 7,125
Required:
Calculate the return on assets, return on sales and asset turnover for both companies. What can you tell about each company on the basis of these ratios?
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