Question
In 2016, Adams Company reported a return on assets of 16 percent and an asset turnover of 1.5. In 2017, the company reported a return
In 2016, Adams Company reported a return on assets of 16 percent and an asset turnover of 1.5. In 2017, the company reported a return on assets of 20 percent but an asset turnover of only 1.1. If sales revenue remained unchanged from 2016 to 2017, what would explain the two ratio results? Select one
: A. Sales and net income increase while total assets remained unchanged.
B. Sales and total assets increased at the same rate while net income grew less fast.
C. Net income increased faster than total assets, while sales remained unchanged.
D. None of the above
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started