Answer:
Paw Locker
The secret to its success include:
c. Uses more equity financing than Dog Nation
d. Pays less interest expense than Pooch Mart
e. Uses less debt financing than Hound Smart
Explanation:
a) Data and Calculations:
Company Dog Shoe Hound Paw Pooch
Warehouse Smart Locker Mart
Return on Equity 0.177 0.178 0.177 0.177 0.177
Return on Assets 0.060 0.119 0.112 0.126 0.111
Financial Leverage 3.740 1.501 1.762 1.430 1.639
Return on Sales 0.026 0.065 0.03 0.065 0.057
Asset Turnover 2.338 1.828 2.93 1.927 1.938
b) Paw Locker's Return on assets (ROA) indicates how profitable it is relative to its total assets. Its ROA gives a manager, investor, or analyst an idea as to how efficient the Paw Locker's management is at using the company's assets to generate earnings. As a percentage, Paw Locker's Return on assets is 12.6% and is better than the other companies' ROAs.