3 Required information Problem 7-9A Calculate and interpret ratios (L07-7) [The following information applies to the questions displayed below.) Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station's business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub's business strategy is to sell the lowest cost sub on the planet. Sub Station Planet Sub Net sales $108,949 $62,771 Net Income 26,622 4,192 Total assets, beginning 75,883 39, 799 Total assets, ending 117,771 45,933 ces Problem 7-9A Part 1 Required: 1. Calculate Sub Station's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (.e. 123,000 should be entered as 123).) Return on Assets Choose Denominator Choose Numerator Return on Assets Return on assets Profit Margin Choose Denominator Choose Numerator + Profit Margin Profit Margin . Asset Turnover Choose Denominator Choose Numerator Asset Turnover Asset Turnover times Problem 7-9A Part 2 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (.e. 123,000 should be entered as 123).) Return on Assets Choose Denominator Choose Numerator Return on Assets Return on assets Profit Margin Choose Denominator Choose Numerator + Profit Margin Profit Margin + + Asset Turnover Choose Denominator Choose Numerator + Asset Turnover Asset Turnover times - 3-a. Which company has the higher profit margin? 13 Sub Station's Planet Sub 3-b. Which company has the higher asset turnover? * ces Sub Station's Planet Sub 3-c. Are the two ratios consistent with the primary business strategies of the two companies? Yes No