Question: In response to complaints about high prices a grocery chain

In response to complaints about high prices, a grocery chain runs the following advertising campaign: “If you pay your child $2 to go buy $50 worth of groceries, then your child makes twice as much on the trip as we do.” You’ve collected the following information from the grocery chain’s financial statements:
($ in millions)
Sales........ $680
Net income..... 13.6
Total assets..... 410
Total debt..... 280

Evaluate the grocery chain’s claim. What is the basis for the statement? Is this claim misleading? Why or why not?



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  • CreatedMarch 13, 2014
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