Question: The Second Cup Ltd. reported the following ratios for 2010 and 2009: (a) Is Second Cup's profitability improving or deteriorating? (b) What is the key

The Second Cup Ltd. reported the following ratios for 2010 and 2009:

(a) Is Second Cup's profitability improving or deteriorating?
(b) What is the key reason driving the change in Second Cup's return on common shareholders' equity in 2010? Explain.

2010 2009 Return on common shareholders' equity Return on assets Debt to total assets Profit margin Asset turnover 13.4% 9.1% 13.8% 370% 0.2 times 16.8% 12.1% 13.8% 58.8% 0.2 times

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