Answer:
1. 2014 = 11 % and 2013 = 15 %
2. 2014 = 1.30 times and 2013 = 1.41 times
3. 2014 = 14.27 % and 2013 = 21.16 %
Explanation:
<u>1. Profit margin ratio
</u>
Profit margin ratio = Earnings Before Interest and Tax / Sales × 100
Therefore,
Profit margin ratio (2014) = ($ 52.400 + $ 9,550 + $12,300) / $675,000 × 100
= 11 %
Profit margin ratio (2013) = $ 72,575 + $ 8,925 + $13,000) / $630,000 × 100
= 15 %
<u>2. Total Asset turnover.
</u>
Total Asset turnover = Sales ÷ Total Assets
Therefore,
Total Asset turnover (2014) = $675,000 ÷ $ 520,500
= 1.30 times
Total Asset turnover (2013) = $630,000 ÷ $446,550
= 1.41 times
<u>3. Return on total asset</u>
Return on total asset = Earnings Before Interest and Tax (EBIT) / Total Assets × 100
Therefore,
Return on total asset (2014) = $ 52.400 + $12,300 + $9,550 / $ 520,500 × 100
= 14.27 %
Return on total asset (2013) = $ 72,575 + $8,925 + $13,000 / $446,550 × 100
= 21.16 %
