E5-19 LO5-4 Determining the Effects of Transactions on Ratios What would be the direction of the effect of the following transactions on the following ratios increase, - for decrease, and NE for no effect)? Consider each item independently. a. Repaid principal of $2,000 on a long-term note payable with the bank. b. Recorded rent expense of $100 paid for in cash. Transaction Net Profit Margin Return on Assets Current Ratio uld b pop E5-17 LO5-4 Analyzing and Interpreting Return on Assets The TJX Companies, Inc., which operates the T.J. Maxx, Marshalls, and HomeGoods chains, is the lead. ing off-price apparel and home fashions retailer in the U.S. and worldwide. Presented here are selected recent income statement and balance sheet amounts (dollars in thousands). Current Year Prior Year Net sales $33,183,744 $30.944,938 Net income 2,298,234 2,277,658 Average shareholders' equity 4,408,837 4,285,653 Average total assets 12,187,120 11,239,591 Source: The TJX Companies, Inc. Required: 1. Compute ROA for the current and prior years and explain the meaning of the change. 2. Explain the major cause(s) of the change in ROA using ROA profit driver analysis