Question 22 2 pts As an intem, you have been given the task to evaluate...
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Question 22 2 pts As an intem, you have been given the task to evaluate the two gardening businesses, Evergreen Gardening, and Bonsai Gardens. The following data is for your review Evergreen Gardening Bonsai Gardens Garden Fees Revenue $800,000 $920,000 Total Assets $1,333,333 $1,150,000 Net Profit Margin 45% 35% Asset Turnover 0.6 times 0.8 times Return on Assets 27% 28% Required: The best statement to reflect profitability when comparing the two entities would be Bonsai Gardens has the marginally superior ROA due to a better Asset Tumover which is driven by a higher garden fees revenue to total assets when compared to Evergreen Gardening Bonsai Gardens Net Profit Margin is higher due to its net profit being $360,000 Bonsai Gardens has a marginally worse ROA due to Evergreen Gardening having a higher Net Profit Margin O Evergreen Gardening ROA is driven by its superior Asset Turnover. Evergreen Gardening Net Profit Margin is superior because its net profit is $322,000
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