12 Roak Company and Clay Company are similar firms that operate in the same Industry, Clay began operations 2 years ago and Roak started 5 years ago. In the current year, both companies pay 7% Interest on their debt to creditors. The following additional Information is available Roak Company Clay Company Current Year 1 Year Ago 2 Years Ago Current Year 1 Year Ago 2 Years Ago Total asset turnover 3.7 3.4 3.6 2.1 2.1 Return on total assets 9.04 10.89 11.44 5.94 5.6 5.34 Profit margin ratio 3.4 3.1 2.94 4.04 4.25 4.15 Sales $440,000 $410, eee $426,ees $240,00 $2e8,een $140,000 1. (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has the better return on assets? 2. Which company has the better rate of growth in sales? 3. Did the company successfully use financial leverage in the current year, as judged by retum an assets exceeding its interest rate on debt, in the case of (a) Rook and (b) Clay? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has the better return on assets? (a) Which company has the better profit margin? (b) Which has the better asset tumover? (c) Which has the better return on assets? Required 2 > 12 Roak Company and Clay Company are similar firms that operate in the same industry, Clay began operations 2 years ago and Roak started 5 years ago. In the current yeur, both compenles pay 7% Interest on their debt to creditors. The following additional Information is avallable. Roak Company Clay Company Current Year 1 Year Ago 2 Years Ago. Current Year 1 Year Ago 2 Years Ago Total asset turnover 3.7 3.4 3.6 2.1 2.1 1.7 Return on total 9.24 10.84 11.44 5.4 5.64 assets 5.34 Profit margin ratio 3. 3.16 2.94 4.04 4.24 4.19 Sales 5440,00 $410,eee $426,000 $248,888 $200,000 $140,000 1. (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has the better return on assets? 2. Which company has the better rate of growth in sales? 3. Did the company successfully use financial leverage in the current year, as judged by retum on assets exceeding its interest rate on debt, in the case of (a) Roak and (b) Clay? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Which company has the better rate of growth in sales? Which company has the better rate of growth in sales? 12 Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations 2 years ago and Roak started 5 years ago. In the current year, both companies pay 7% Interest on their debt to creditors. The following additional Information is available. Roak Company Clay Company Current Year 1 Year Ago 2 Years Ago. Current Year 1 Year Ago 2 Years Ago Total asset turnover 3.6 2.1 2.1 1.7 Return on total assets 9.04 18.86 11.44 5.99 5.66 5.39 Profit margin ratio 3.04 3.16 2.94 4.09 4.25 4.14 Sales $440,00 $410,eee $426,888 $240,000 $288,eee $140,000 1. (e) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has the better return on assets? 2. Which company has the better rate of growth in sales? 3. Did the company successfully use financial leverage In the current year, as judged by return on assets exceeding its interest rate on debt, in the case of (a) Roak and (b) Clay? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Did the company successfully use Financial leverage in the current year, as judged by return on assets exceeding its interest rate on debt, in the case of (a) Roak and (b) Clay? (a) Did Rosk Company successfully use financial leverage in the current year, as udged by return on assot exceeding is interest rate on debt? (b) Did Clay Company Successfully se financial leverage in the current years judged by return on assets exceeding is interest rate on debt?
