In response to complaints about high prices, a grocery chain runs the following advertising campaign: If you

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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:

__________(Millions)__________

Sales .......................... $840.00

Net income ..................... 16.80

Total assets .................... 385.00

Total debt ..................... 263.50

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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Essentials of Corporate Finance

ISBN: 978-0078034756

8th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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