Return on Assets Daisy Company reports the following information in its financia

Question

Return on Assets Daisy Company reports the following information in its financial statements. Numbers are in thousands. 2016 2015 Net Sales $41,300 $44,100 Net Income 12,500 16,250 Total Assets 63,900 87,400 There were 4,000 outstanding shares at December 31, 2016 a. What was Daisy's return on assets for 2016 and 2015? (Round to one decimal point) b. Based on your answer from part a., how did the company's performance change from 2015 to 2016? a. 2016 2015 Return on Assets 0% b. Daisy's performance, as measured by its return on assets, from 0 %in 201 5 to O 96 in 2016. Check

Explanation / Answer

Answer a.

2016:

Return on Assets = Net Income / Total Assets
Return on Assets = $12,500 / $63,900
Return on Assets = 19.6%

2015:

Return on Assets = Net Income / Total Assets
Return on Assets = $16,250 / $87,400
Return on Assets = 18.6%

Answer b.

Daisy’s performance, as measured by its return on assets, improved from 18.6% in 2015 to 19.6% in 2016.

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