Computing and Interpreting Financial Statement Ratios

Following are selected ratios of Norfolk Southern.

Return on Assets $($ROA$)$ Component FY$4$ FY$3$

Profitability $($Net income$/$Sales$)66\mathrm{.}8\%70\mathrm{.}2\%$

Productivity $($Sales$/$Average assets$)0\mathrm{.}8550\mathrm{.}757$

a$.$ Was the company profitable in FY$4?$ Answer $1$

b$.$ In which year was the company more profitable? Answer $2$

c$.$ Is the change in productivity a positive or negative development? Answer $3$

d$.$ Compute the company$$s ROA for both years. Note: Enter your answer as a percentage rounded to one decimal place $($Ex: $29\mathrm{.}4\%).$

FY$4$ Answer $4$

$0$

$\%$

FY$3$ Answer $5$

$0$

$\%$

e$.$ From the information, which of the following best explains the change in ROA during FY$4?$