Computing and Interpreting Financial Statement Ratios Following are selected ratios of Norfolk Southern for 2018 and 2017. Return on Assets (ROA) Component 2018 2017 Profitability (Net income/Sales) 24.3% 52.2% Productivity (Sales/Average assets) 0.328 0.309 a. Was the company profitable in 2018? AnswerYesNo b. Was the company more profitable in 2018 or 2017? Answer20172018 c. Is the change in productivity a positive or negative development? AnswerPositiveNegative
Computing and Interpreting Financial Statement Ratios Following are selected ratios of Norfolk Southern for 2018 and 2017. Return on Assets (ROA) Component 2018 2017 Profitability (Net income/Sales) 24.3% 52.2% Productivity (Sales/Average assets) 0.328 0.309 a. Was the company profitable in 2018? AnswerYesNo b. Was the company more profitable in 2018 or 2017? Answer20172018 c. Is the change in productivity a positive or negative development? AnswerPositiveNegative
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 90PSA
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Computing and Interpreting Financial Statement Ratios
Following are selected ratios of Norfolk Southern for 2018 and 2017.
| Return on Assets (ROA) Component | 2018 | 2017 |
|---|---|---|
| Profitability (Net income/Sales) | 24.3% | 52.2% |
| Productivity (Sales/Average assets) | 0.328 | 0.309 |
a. Was the company profitable in 2018?
AnswerYesNo
b. Was the company more profitable in 2018 or 2017?
Answer20172018
c. Is the change in productivity a positive or negative development?
AnswerPositiveNegative
d. Compute the company’s ROA for 2018 and for 2017.
Note: Round answers to one decimal places (example: 10.4%).
| ROA | |
|---|---|
| 2018 | Answer
|
| 2017 | Answer
|
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