A Company Reported Net Income for Year 1 of $98,000

question 197

Essay

A company reported net income for Year 1 of $98,000 and $106,000 for Year 2.It also reported net sales of $835,000 in Year 1 and $918,000 in Year 2.The company's average total assets in Year 1 were $1,850,000 and $1,720,000 in Year 2.Calculate the company's profit margin,total asset turnover and return on total assets for Year 1 and Year 2.Did the company's return on total assets improve? What component(s)might explain this change?

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Definitions:

Quantitative Studies

Research methods involving the collection and analysis of numerical data to understand patterns, relationships, or trends within a study field.

Scientifically Rigorous

Characterized by the strict adherence to the principles of the scientific method, ensuring validity and reliability in research findings.

Validity

The accuracy of a given measurement.

Consistency Result

Consistency result describes a situation in logic or mathematics where a set of statements or equations do not contradict each other and can coexist without generating errors.