Toys is a retail toy store that has branched out into selling childrens clothing and

other related baby and child products. The following are selected figures from their income

statement (in millions):

2017

2016

2015

Sales revenues

$11,332

$11,862

$11,170

Net income

404

279

(132)

Average total assets

8,178

8,126

7,931

Average stockholders' equity

3,549

3,652

4,026

Required

a. Compute the following ratios for 2017, 2016 and 2015:

i.

Net profit margin

ii.

Asset turnover

iii.

Return on equity

b. Explain what has happened to the return on equity for Discount Toys and discuss the causes

of changes in the ratio for the three years.