A Company Reported Net Income for 2009 of $98,000 and $106,000

question 3

Essay

A company reported net income for 2009 of $98,000 and $106,000 in 2010.It also reported net sales of $735,000 in 2009 and $798,000 in 2010.The company's average total assets in 2009 were $1,850,000 and $1,720,000 in 2010.Calculate this company's profit margin,total asset turnover and return on total assets for 2009 and 2010.Comment on the results.

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Definitions:

Variable Costs

Costs that vary directly with the level of production, such as materials and labor, in contrast to fixed costs which remain constant regardless of production level.

Homogeneous Products

Goods that are identical in quality and features, making them interchangeable in the eyes of consumers.

Indistinguishable

Incapable of being identified as different or distinct, often used in contexts where two or more items appear exactly alike.

MR

In economics, Marginal Revenue, referring to the increase in revenue that results from the sale of one additional unit of output.