Campo Systems reported the following financial data (in millions) in its annual report: For...

Question:

Campo Systems reported the following financial data (in millions) in its annual report:

For 2015:

Income 8,052

Net sales 52,250

Net assets 56,734

For 2016:

Net income 7,250

Net sales 36,117

Net assets 68,128

If the company's total assets are $55,676 in 2014, calculate the company's return on assets and asset turnover for 2015 and 2016.

Asset Ratios

Financial statement analysis is a process of analyzing data to understand a company's performance. One area of focus is on assets. A company needs to understand if their assets are being used efficiently in order to maximize profitability. "Return on Assets" and "Asset Turnover" are ratios that help with this analysis.

Answer and Explanation: 1

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2015 2016
Return on assets 14.3% 11.6%
Asset Turnover 0.93 times 0.58 times

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Financial Statement Ratios: Determining Company Performance

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Chapter 3 / Lesson 11
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Learn about financial ratios. Understand what a financial ratio is, identify the types of financial ratios, and see what constitutes financial ratio analysis.


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