Measures of Performance and Financial Leverage (LO6)

Following are selected data from year-end financial statements of Nelox Corporation for 2012 and OM, 2012 Ott UROTENERSIEUS) oid lace coisnreaecac ene ei e $7,349,000 $6,553,000 ItOhOSlexXDENSe wer reeeen temaiteratelses itt. «nx sor ceeeeehs eee ept eeeee 115,000 102,000 JLeoynre neti TSIM 5 Shan bce eo nd ORR oe ES Be 1,220,000 1,239,000 INOUIMNC Ol Ormiraar abs entuctee rte membre eta hs 5% -5-0/

a. Compute the following performance measurement ratios for 2012. (Round computations to three decimal places and ignore income taxes.)
1. Asset turnover 2. Return on sales 3. Return on assets 4. Return on equity

b. Is Nelox Company using financial leverage? If so, is the leverage favorable or unfavorable?
Explain. LO.1