Question Content Area

Return on assets

Pfizer Inc. (PFE) discovers, produces, and distributes medicines, including Celebrex and Lipitor. Ford Motor Co. (F) develops, markets, and produces automobiles and trucks. Microsoft Corporation (MSFT) develops, produces, and distributes a variety of computer software and hardware products including Windows, Office, Excel, and the Xbox.

1. The following data (in millions) were taken from recent financial statements of each company:

Line Item Description	Pfizer	Ford	Microsoft
Net income	$21,979	$17,937	$61,271
Total assets at the beginning of the year	154,229	257,035	301,311
Total assets at the end of the year	181,476	267,261	333,779

Compute the return on assets for each company using the preceding data, and rank the companies' return on assets from highest to lowest. Round the return on assets to one decimal place.

Company	Return on assets	Rank
Pfizer	fill in the blank 1	Rank 1Rank 2Rank 3Rank 1
Ford	fill in the blank 3	Rank 1Rank 2Rank 3Rank 2
Microsoft	fill in the blank 5	Rank 1Rank 2Rank 3Rank 3

2. All of the following statements regarding the rate of return on asset rankings for Microsoft, Pfizer, and Ford are true except: 1. Microsoft has the highest return on assets. 2. Ford has the lowest return on assets. 3. Microsoft has been challenged by competitors such as Alphabet (Google). 4. Pfizer has the highest return on assets.