Selected financial ratios for RMN, Incorporated, are as follows:

a. Why did return on investment decline?
b. Was the increase in debt a result of greater current liabilities or of greater long-term debt? Explain.

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20X1 20X2 20X3 Current ratio Acid-test ratio Debt-to-total-assets Inventory tumover Average collection period Total asset tumover Net profit margin Return on investment (ROI) Retum on equity (ROE) 4.2 2.1 23% 8.7x 33 days 3.2X 3.890 12.1% 15.7% 2.6 1.0 33% 5.4x 36 days 2.6x 2.5% 6.5% 9.7% 1.8 0.6 47% 3.5X 49 days 1.9x 1.4% 2.8% 5.4%