PROBLEM 12-6. Return on Investment, Profit Margin, and Investment Turnover [LO 4] Consider the following information for HandyCraft Stores for 2014 and 2015:

2014 2015

Total assets $59,500,000 $56,430,000

Noninterest-bearing current liabilities 4,400,000 4,950,000

Net income 3,650,000 4,950,000

Interest expense 2,420,000 2,975,000

Sales 66,000,000 96,250,000

Tax rate 40% 40%

Required

a. Compute ROI for both years.

b. Break ROI down into profit margin and investment turnover.

c. Comment on the change in financial performance between 2014 and 2015