PROBLEM - Return on Investment
Consider the following information for McKinley and Son, Inc.
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12/31/2011
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12/31/2012
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Total assets
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$50,000,000
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$56,200,000
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Noninterest-bearing current liabilities
|
1,000,000
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1,200,000
|
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Net income
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3,000,000
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3,115,000
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Interest expense
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660,000
|
700,000
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Tax rate
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35%
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35%
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Required
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|
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Required -
a. Evaluate the company in terms of ROL
b. While income has increased in fiscal 2012, is it clear that the company's performance has improved?