Question: (Learning Objective 6: Evaluating profi tability) Luna Inns reported these fi gures for 20X7 and 20X6 (in millions): Requirement 1. Compute Lunas return on

(Learning Objective 6: Evaluating profi tability) Luna Inns reported these fi gures for 20X7 and 20X6 (in millions):

❙ Requirement 1. Compute Luna’s return on assets and return on ordinary shareholders’ equity for 20X7.

Do these rates of return suggest strength or weakness? Give your reason.

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