Business
Managerial Accounting
Net sales, net income, and total assets for Lloyd Shipping,

Net sales, net income, and total assets for Lloyd Shipping, Inc., for a five-year period follow: Requirements

Question:

Net sales, net income, and total assets for Lloyd Shipping, Inc., for a five-year period follow:

Requirements
1. Compute trend percentages for each item for 2011 through 2014. Use 2010 as the base year and round to the nearest percent.
2. Compute the rate of return on net sales for 2012 through 2014, rounding to three decimal places. Explain what this means.
3. Compute asset turnover for 2012 through 2014. Explain what this means.
4. Use DuPont Analysis to compute rate of return on average total assets (ROA) for 2012 through 2014.
5. How does Lloyd Shippingâ€™s return on net sales compare with previous years? How does it compare with that of the industry? In the shipping industry, rates above 9% are considered good, and rates above 11% are outstanding.
6. Evaluate Lloyd Shipping, Inc.â€™s ROA for 2014, compared with previous years, and against an 18% benchmark for theindustry.

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

Transcribed Image Text:

(In thousands) 2014 2013 2012 2011 2010 ..$500 $418 $365 309 $299 27 298 262 249 223 201 Net income.. 39 43 34

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Financial Accounting

ISBN: 978-0133427530

10th edition

Authors: Walter Harrison, Charles Horngren, William Thomas

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Question Posted: Jul 25, 2014 08:47 AM

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