Computing and Interpreting Financial Statement Ratios Following are selected ratios of Norfolk Southern. Return on Assets (ROA) Component Profitability (Net income/Sales) FY4 FY3 25.7% 27.0% Productivity (Sales/Average assets) 0.329 0.291 a. Was the company profitable in FY4? ÷ b. In which year was the company more profitable? ÷ c. Is the change in productivity a positive or negative development? ÷ d. Compute the company's ROA for both years. Note: Enter your answer as a percentage rounded to one decimal place (Ex: 29.4%). FY4 % FY3 % e. From the information, which of the following best explains the change in ROA during FY4?
Computing and Interpreting Financial Statement Ratios Following are selected ratios of Norfolk Southern. Return on Assets (ROA) Component Profitability (Net income/Sales) FY4 FY3 25.7% 27.0% Productivity (Sales/Average assets) 0.329 0.291 a. Was the company profitable in FY4? ÷ b. In which year was the company more profitable? ÷ c. Is the change in productivity a positive or negative development? ÷ d. Compute the company's ROA for both years. Note: Enter your answer as a percentage rounded to one decimal place (Ex: 29.4%). FY4 % FY3 % e. From the information, which of the following best explains the change in ROA during FY4?
Chapter5: Evaluating Operating And Financial Performance
Section: Chapter Questions
Problem 7EP
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Transcribed Image Text:Computing and Interpreting Financial Statement Ratios
Following are selected ratios of Norfolk Southern.
Return on Assets (ROA) Component
Profitability (Net income/Sales)
FY4 FY3
25.7% 27.0%
Productivity (Sales/Average assets)
0.329 0.291
a. Was the company profitable in FY4?
÷
b. In which year was the company more profitable?
÷
c. Is the change in productivity a positive or negative development?
÷
d. Compute the company's ROA for both years. Note: Enter your answer as a percentage rounded to one decimal place (Ex: 29.4%).
FY4
%
FY3
%
e. From the information, which of the following best explains the change in ROA during FY4?
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