The president of Blue Moon Corp. and her department managers are reviewing the operating results of the year just completed. Sales increased by 12% from the previous year to $730,000. Average total assets for the year were $400,000. Net income, after adding back interest expense, net of tax, was $60,000.

The president is happy with the performance over the past year but is never satisfied with the status quo. She has set two specific goals for next year: (1) a 15% growth in sales and (2) a return on assets of 20%.

To achieve these goals, the president has stated her intention to increase the total asset base by 10% over the base for the year just completed.

Required:

1. For the year just completed, compute the following ratios. Round your answers to two decimal places.

a. Return on sales	%
b. Asset turnover	times
c. Return on assets	%

2. Compute the necessary asset turnover for next year to achieve the president's goal of a 15% increase in sales. Round your answer to two decimal places. times

3. Calculate the income needed next year to achieve the goal of a 20% return on total assets. (Note: Assume that income is defined as net income plus interest, net of tax.) $