Question: Mega Manufacturing has calculated the following financial ratios, based on the companys comparative financial statements for 2016 and 2015: Required: Briefly explain what each of

Mega Manufacturing has calculated the following financial ratios, based on the company€™s comparative financial statements for 2016 and 2015:

Profit margin ratio Return on assets Return on equity 2016 18% 1096

Required:
Briefly explain what each of the ratios indicates, and comment on the company€™s performance during this two-year period.

Profit margin ratio Return on assets Return on equity 2016 18% 1096 12% 2015 20% 8% 10% Industry Average 16% 12% 14%

Step by Step Solution

★★★★★

3.39 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Mega Manufacturing appears to be improving its financial position to be more In line with the perfor... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

468-B-A-T-D (1820).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Mega Manufacturing has calculated the following financial ratios, based on the company's comparative financial statements for 2011 and 2010: Briefly explain what each of the ratios indicates, and...

Q:

Explain what each of the following terms or phrases means: a. Venture capital b. Book building c. Underwriting spread d. Registration statement e. Winners curse

Q:

The following financial ratios have been provided to you by your company: Your boss has asked you to prepare a press release to highlight the company's financial results. Analysts have been...

Q:

Mega Manufacturing has calculated the following financial ratios, based on the companys comparative financial statements for 2020 and 2019: Required Briefly explain what each ratio indicates, and...

Q:

Mega Manufacturing has calculated the following financial ratios, based on the companys comparative financial statements for 2024 and 2023: Required Briefly explain what each ratio indicates, and...

Q:

AP12-10 (Analysis using selected ratios) The following ratios and other information are based on a company's comparative financial statements for a two-year period 2016 2015 Current ratio Quick ratio...

Q:

QUESTION 3 (25 marks) You are the external auditor of Life & Style Ltd, a company running a group of nurseries and home accessories businesses. The company was started five years ago by Mr John...

Q:

need to solve 13.1 and 13.2 that's all information we have Chapter 13 Members of the company's board of directors are surprised to see that net income increased by only $38,000 when sales increased...

Q:

QUESTION 2 (15 marks) Your audit firm is responsible for the audit of Elite Vehicles Ltd, a manufacturer of motor vehicles for the commercial market. Elite Vehicles Ltd employs 5 000 people at their...

Q:

Company overview: You have been appointed as one of the auditors for this company. The business has one main branch in the city and despite all its competitors opening online stores, and introducing...

Q:

Write equations showing how you could prepare each of the following from benzene and any other necessary reagents. a. P-chlorobenzoic acid b. P-isopropylbenzenesulfonic acid c. 2-bromo-4-ethyltoluene...

Q:

Wells Research Service, Inc., (WRSI) ended 2011 with retained earnings of $73,000. During 2012, WRSI earned net income of $93,000 and declared dividends of $26,000. Also during 2012, WRSI got a...

Q:

Explain in detail what is a firm's Capital Structure? What is and how does a firm's Financial Policy impact its Capital Structure? Finally, what is opportunity costs and how does it affect a firm's...

Q:

Describe and evaluate the GBLs business model. Do you think it can work? Why or why not?

Q:

Dividend Aristocrat Inc. (DA) borrowed $200,000 from Grow Business Bank to finance the purchase of equipment costing $150,000 and to provide $50,000 in cash. The legal documentation states that the...

Q:

Joans Golf Shop Ltd. had the following transactions involving current liabilities in its fi rst year of operations: 1. The company ordered golf equipment from suppliers for $546,000, on credit. It...

Q:

Shamsud Ltd. operates on a calendar-year basis. At the beginning of December 2020, the company had the following current liabilities on its books: Accounts payable...

Q:

Jack is very excited that his idea is coming to fruition. As he plans the details of the staycation pregamme, he needs to make sure that he can deploy the partner resources cost eiciently. (a)...

Q:

Please use R to solve this: Question 2 A study was conducted on GRE test takers to evaluate the success conditions. The success rate is 25%. A sample of 30 test takers is selected for the study. Use...

Q:

A firm sells on terms of 3/10, net 30. Total credit sales for the year are $912,500. Forty percent of customers pay on the 10th day and take discount; the rest pay, on average, 40 days after...