Analysis by affiliates) Omni T

Analysis by affiliates) Omni Technology Holding Company has the following three affiliates:

Personal Foreign Software Computers Operations Sales $40,200,000 $60,080,000 $100,680,000 Net income (after taxes) 2,086,000 2,880,000 8,510,000 Assets 5,820,000 25,790,000 60,630,000 Stockholders’ equity 4,090,000 10,170,000 50,950,000

a. Which affiliate has the highest return on sales?

b. Which affiliate has the lowest return on assets?

c. Which affiliate has the highest total asset turnover?

d. Which affiliate has the highest return on stockholders’ equity?

e. Which affiliate has the highest debt ratio? (Assets minus stockholders’ equity equals debt.)

f. Returning to question b, explain why the software affiliate has the highest return on total assets.

g. Returning to question d, explain why the personal computer affiliate has a higher return on stockholders’ equity than the foreign operations affiliate even though it has a lower return on total assets.

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