Question:
Compute trend percentages, return on sales, asset turnover, and ROA, and compare with industry) Net sales, net income, and total assets for Aaron Shipping, Inc., for a five-year period follow:
|
(In thousands)
|
2012
|
2011
|
2010
|
2009
|
2008
|
|
Net sales
|
$900
|
$400
|
$352
|
$314
|
$296
|
|
Net income
|
50
|
39
|
46
|
37
|
24
|
|
Total assets
|
308
|
269
|
252
|
231
|
209
|
? Requirements
1. Compute trend percentages for each item for 2009 through 2012. Use 2008 as the base year and round to the nearest percent.
2. Compute the rate of return on net sales for 2010 through 2012, rounding to three decimal places. Explain what this means.
3. Compute asset turnover for 2010 through 2012. Explain what this means.
4. Use DuPont analysis to compute rate of return on average total assets (ROA) for 2010 through 2012.
5. How does Aaron Shippings return on net sales for 2012 compare with previous years? How does it compare with that of the industry? In the shipping industry, rates above 5% are considered good, and rates above 7% are outstanding.
6. Evaluate Aaron Shipping, Inc. ROA for 2012, compared with previous years, and against a 15% benchmark for the industry.