Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended January 31, 2018 Requirements 1 Compute the net profit margin ratio for the years ended January 31, 2018, and 2017 Did it improve or worsen in 2018 2 Compute asset turnover f...

Req 1 The net profit margin ratio improved from 2017 to 2018 Req ...

Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended

Question:

Hometown Supply Company reported the following information in its comparative financial statements for the fiscal year ended January 31, 2018:

January 31, January 31, 2018 2017 Net sales.. Net earnings.. Average total assets. $84,000 $ 4,200 $70,000 $82,600 $ 4,0

Requirements

1. Compute the net profit margin ratio for the years ended January 31, 2018, and 2017. Did it improve or worsen in 2018?

2. Compute asset turnover for the years ended January 31, 2018, and 2017. Did it improve or worsen in 2018?

3. Compute return on assets for the years ended January 31, 2018, and 2017. Did it improve or worsen in 2018? Which component—net profit margin ratio or asset turnover—was mostly responsible for the change in the company’s return on assets?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

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