13.The following information is available for Sawyer Company:
20072008
Sales$6,000,000$7,110,000
Operating expenses1,000,0002,250,000
Net income3,375,0004,000,000
Average assets7,500,00010,000,000
Average liabilities6,000,0007,500,000
Stockholders' equity1,500,0002,500,000
Required:
a.Calculate return on assets (ROA) for each year.
b.Calculate profit margin and asset turnover for each year.
c.Discuss the reasons for the change in ROA from 2007 to 2008.
14.The following information is available for China Grove Company:
20082007
Sales$9,000,000$ 7,500,000
Operating expenses1,500,0001,200,000
Net income4,500,0002,250,000
Total assets15,000,00012,500,000
Total liabilities8,000,0007,000,000
Stockholders' equity7,000,0005,500,000
Required:
a.Calculate return on assets (ROA) for each year.
b.Calculate profit margin and asset turnover for each year.
c.Discuss the reasons for the change in ROA from 2007 to 2008.