Question 1

Computing and Interpreting Financial Statement Ratios

Following are selected ratios of Norfolk Southern for 2018 and 2017.

Return on Assets (ROA) Component	2018	2017
Profitability (Net income/Sales)	24.3%	52.2%
Productivity (Sales/Average assets)	0.328	0.309

e. From the information provided, which of the following best explains the change in ROA during 2018? Answer1. The companys profitability weakened considerably.2. The companys profitability weakened considerably and its productivity fell.3. The company had markedly more assets in 2018.4. The company had a marked drop in revenue in 2018.