Profit Margin
In response to complaints about high prices, a grocery chain runs the following advertising campaign: “If you pay your child 50 cents to go buy $25 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 |
$550.0 |
|
Net income |
5.5 |
|
Total assets |
140.0 |
|
Total debt |
90.0 |
Evaluate the grocery chain claim. What is the basis for the statement? Is this claim misleading? Why or why not?