l. Return on assets ratio.

ROA = Net Income/ Total Assets

• 2020

  • Net Income: 652.1 million = 652,100,000

  • Total Assets: 7,924.2 million = 7,924,200,000

    • 652,100,000 / 7,924,200,000 = 0.08229221 ~ 0.08

      • ROA ratio for the 2020 fiscal year = 0.08.

• 2021

  • Net Income: 834.2 million = 834,200,000

  • Total Assets: 8,382.4 million = 8,382,400,000

    • 834,200,000 / 8,382,400,000 = 0.09951803 ~ 0.1

      • ROA ratio for the 2021 fiscal year = 0.1.

• Increase from 2020 2021

m. Profit margin ratio.

• The gross profit margin increased from 68.4% in the fiscal year 2020 to 74.0% in the 2021 fiscal year. This resulted in a 370 basis points increase.

n. Asset turnover ratio.

Asset turnover ratio = Net Sales/ Average Total Assets

• Net Sales

  • 2020: 3,525.7 million = 3,525,700,000

  • 2021: 4,253.1 million = 4,253,100,000

• Average Total Assets

  • Add the total assets for the current year to the total assets for the previous year, and divide by two.

    • Total Assets for 2020:7,924.2 million = 7,924,200,000

    • Total Assets for 2021: 8,382.4 million = 8,382,400,000

      • 7,924,200,000 + 8,382,400,000 / 2 = 8,153,300,000

        • Average total assets = 8,153,300,000

• Asset Turnover Ratio for 2020

  • 3,525,700,000/ 8,153,300,000 = 0.43242613 ~ 0.43

• Asset Turnover Ratio for 2021

  • 4,253,100,000 / 8,153,300,000 = 0.52164154 ~ 0.52

• Increase from 2020 2021

o. Gross profit rate.

Gross Profit Ratio= gross profit/ net sales * 100

• 2020:

  • Gross Profit was 2,411.6 million = 2,411,600,000

  • Net sales Percentage = 68.4% = .684

  • Net Sales 2020 = 3,525.7 million = 3,525,700,000

    • 2,411,600,000/ 3,525,700,000 = 0.68400601 ~ 0.68* 100 = 68

  • The Gross Profit Ratio for 2020 would be 68%.

• 2021:

  • Gross Profit was 3,149.0 million = 3,149,000,000

  • Net Sales Percentage = 74.0 % = .740

  • Net Sales for 2021 = 4,253.1 million = 4,253,100,000

    • 3,149,000,000/ 4,253,100,000 = 0.74040111 ~ 0.74 * 100 = 74

  • The Gross Profit Ratio for 2021 would be 74%.

• The ending result showed that between the 2020 and 2021 fiscal year there was a 30.6% gross profit increase as stated on the annual report by Tapestry.

• An increase from 2020 2021

p. Earnings per share. (you can use the basic earnings per share from the annual report income statement)

• The basic earnings per share for the 2020 year was stated as $2.34

• The basic earnings per share for the 2021 year was stated as $3.00

• An increase from 2020 2021

• What conclusions concerning the companys profitability can be drawn from these ratios (l-p)?