Can you provide the equations that are used to arrive at every answer. Below is the transcribed summary of financial data from Barnie Company's annual report, formatted for an educational website:---**Financial Summary (In millions)****Year 2 vs Year 1****Balance Sheet**- **Total Assets:** - Year 2: $111,005 - Year 1: $153,304- **Shareholders' Equity:** - Year 2: $68,612 - Year 1: $69,493**Income Statement**- **Net Sales:** - Year 2: $101,303 - Year 1: $96,004- **Net Income:** - Year 2: $14,132 - Year 1: $14,490**Tasks:**A. **Calculate the following financial ratios for Year 1 and Year 2:**1. Return on Equity2. Return on Assets (Levered)3. Return on Sales (Levered)4. Total Asset Turnover5. Financial LeverageB. **Analyze and comment on the trends revealed by your ratio calculations in Part A.**---

Answered: Presented below are summary financial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Can you provide the equations that are used to arrive at every answer.

Below is the transcribed summary of financial data from Barnie Company's annual report, formatted for an educational website:

---

**Financial Summary (In millions)**

**Year 2 vs Year 1**

**Balance Sheet**
- **Total Assets:**
- Year 2: $111,005
- Year 1: $153,304
- **Shareholders' Equity:**
- Year 2: $68,612
- Year 1: $69,493

**Income Statement**
- **Net Sales:**
- Year 2: $101,303
- Year 1: $96,004
- **Net Income:**
- Year 2: $14,132
- Year 1: $14,490

**Tasks:**

A. **Calculate the following financial ratios for Year 1 and Year 2:**
1. Return on Equity
2. Return on Assets (Levered)
3. Return on Sales (Levered)
4. Total Asset Turnover
5. Financial Leverage

B. **Analyze and comment on the trends revealed by your ratio calculations in Part A.**

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Introduction:

Total assets is the amount owned by the company.

Total assets is the sum of total liabilities and total equity.

Net income is the difference between revenue and expense of the year for the business.

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