A company had net income of $86,000 in Year 1 and $118,000 in Year 2. Its net sales were
$640,000 in Year 1 and $611,000 in Year 2. Its average total assets in Year 1 were $1,670,000 and
$1,712,000 in Year 2. Calculate the profit margin, total asset turnover and return on total assets for both years. Comment on the results.

Question

Quizplus · Accepted Answer

The Answer of A company had net income of $86,000 in Year 1 and $118,000 in Year 2. Its net sales were
$640,000 in Year 1 and $611,000 in Year 2. Its average total assets in Year 1 were $1,670,000 and
$1,712,000 in Year 2. Calculate the profit margin, total asset turnover and return on total assets for both years. Comment on the results.

A Company Had Net Income of $86,000 in Year 1