The following table presents ROA calculations for The Kroger Co., Publix Super Markets, and Weis Markets, Inc. for several years prior to those examined in the chapter.

Required:

1. Which company has shown the strongest sales growth over the past three years?

2. Which company was the most profitable in its most recent fiscal year? What was the source of that superior profitability—a profit margin advantage or better turnover?

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The Kroger Co. Year Ending 01/28/12 02/02/13 02/01/14 01/31/15 Sales (in millions of dollars) Profit margin (EBI/sales) Asset turnover (Sales/Average assets) ROA = Margin x Asset turnover $90,374 $96,619 $98,375 $108,465 1.90% 0.95% 1.85% 1.83% 3.85 3.92 3.36 3.63 6.91% 3.65% 7.24% 6.14% Publix Super Markets Year Ending 12/31/11 12/29/12 12/28/13 12/27/14 Sales (in millions of dollars) Profit margin (EBI/sales) Asset turnover (Sales/Average assets) ROA = Margin x Asset turnover $26,967 $27,485 $28,917 $30,560 5.68% 5.53% 5.65% 5.72% 2.39 2.24 2.13 2.03 13.24% 12.64% 12.21% 11.50% Weis Markets, Inc. Year Ending 12/31/11 12/29/12 12/28/13 12/27/14 $2, 701 3.05% Sales (in millions of dollars) Profit margin (EBI/sales) Asset turnover (Sales/Average assets) ROA = Margin x Asset turnover $2,753 $2,693 $2,777 2.75% 2.66% 1.99% 2.67 2.48 2.34 2.33 7.35% 7.57% 6.25% 4.63%