value: 7.50 points Papa John\'s is one of the fastest-growing pizza delivery and

Question

value: 7.50 points Papa John's is one of the fastest-growing pizza delivery and carry-out restaurant chains in the country Presented here are selected income statement and balance sheet amounts (dollars in thousands) Net sales Net income Average shareholders' equity Average total assets Current Year Prior Year $1,232,087 $1,232,087 30,735 146,536 383,728 45,796 119,445 394,143 Required: 1. Compute ROA for the current and prior years. (Round your answers to 3 decimal places.) Current Year Prior Year ROA 2. Would security analysts more likely increase or decrease their estimates of share value on the basis of this change? Decrease Increase

Explanation / Answer

1. ROA = Net Income / Average Total Assets

Current year:

ROA = $45,796 / $394,143 = 0.116

Prior year:

ROA = $30,735 / $383,728 = 0.080

2. Increase

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