Terri Morton has been recently hired as a financial analyst. Her first assignment is to analyze why the reported return on assets (ROA) for Arnold Company is so much different from that of Baker Company. Arnold Company develops and markets innovative consumer products. Baker Company is a fabricator of heavy steel products. Both companies have net incomes of $1 million, but Arnold has reported total assets of only $3 million compared to $6 million for Baker. Terri suspects her new boss is using this assignment to test her understanding of financial statements. Terri’s boss did give her one cryptic clue: unrecorded assets. Prepare Terri’s analysis.