Safeway operates 1,678 supermarkets in the United States and Canada. In the United States, Safeway is located

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Safeway operates 1,678 supermarkets in the United States and Canada. In the United States, Safeway is located principally in the Western, Southwestern, Rocky Mountain, Midwestern, and Mid-Atlantic regions. Kroger operates 2,435 stores in Northeastern, Western, Midwestern, and Southern states. Supervalu operates 2,434 stores throughout the United States. Selected financial statement information for 2011 for these three companies follows (in millions of U.S. dollars).
Safeway operates 1,678 supermarkets in the United States and Canada.

1. For each of the three companies, compute the following ratios:
(a) Current ratio
(c) Asset turnover
(b)
Debt ratio
(d) Return on equity
2. Which company uses its inventory most efficiently? Which company uses its property, plant, and equipment most efficiently?
3. What dangers might there be in making ratio comparisons without viewing the financial statement notes for the individual companies?

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Intermediate Accounting

ISBN: 978-1133957911

19th edition

Authors: Earl K. Stice, James D. Stice

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