Return on Investment, Profit Margin, and Investment Turnover Consider the following information for HandyCraft Stores for 2014 and 2015.
2014 Total Assets 42,000,000 Noninterest-bearing current liabilities 3,600,000 Net income 3,000,000 Interest expense 2,000,000 Sales 57,000,000 Tax Rate 40%
2015 Total Assets 47,500,000 Noninterest-bearing current liabilities 4,100,000 Net income 4,000,000 Interest expense 2,500,000 Sales 81,000,000 Tax Rate 40%
Compute ROI for both years.
Break ROI down into profit margin and investment turnover.
Comment on the change in financial performance between 2014 and 2015.