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

question 107

Essay

A company reported net income for Year 1 of $98,000 and $106,000 for Year 2. It also reported net sales of $735,000 in Year 1 and $798,000 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 1and Year 2. Comment on the results.


Definitions:

Jeffrey Sachs

An American economist known for his work on sustainable development, poverty alleviation, and as a special advisor to the United Nations.

Foreign Aid

Financial assistance provided by one country to another, often for developmental or humanitarian purposes.

Market Economies

Economic systems in which decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Multilateral Aid

Financial assistance provided by multiple governments or organizations to support economic development and welfare in developing countries.

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