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Requirements 013 erce 1. Compute trend percentages for each item for 2013 throug

ID: 2588863 • Letter: R

Question

Requirements 013 erce 1. Compute trend percentages for each item for 2013 through 2016. Use 2012 as the base year and round to the nearest percent. 2. Compute the rate of return on net sales for 2014 through 2016. Explain what this means. 3. Compute asset turnover for 2014 through 2016. Explain what this means. 4. Use DuPont Analysis to compute rate of return on average total assets (ROA) for 2014 through 2016. How does Azul Shipping's return on net sales for 2016 compare with previous years? How does it compare with that of the industry? In the shipping industry. rates above 9% are considered good, and rates above 11% are outstanding. Evaluate Azul Shipping, Inc.'s ROA for 2016, compared with previous years and against an 18% benchmark for the industry. 5. 6. Print Done

Explanation / Answer

2016

2015

2014

2013

2012

sales

1000

501

700

313

302

net income

60

34

21

29

24

total assets

308

268

252

224

206

2016

2015

2014

2013

2012

requirement -1

sales

231%

66%

132%

4%

100%

net income

150%

42%

-13%

21%

100%

total assets

50%

30%

22%

9%

100%

requirement-2

net income

- preferred dividend

/

net sales

= return on sales

2014

21

0

/

700

3.0%

2015

34

0

/

501

6.8%

2016

60

0

/

1000

6.0%

requirement-3

net sales

/

average assets = (opening balance+closing balance)/2

2014

700

/

238

2.941

2015

502

/

260

1.931

2016

1000

/

288

3.472

requirement-4

rate of return on sales

X

Asset turnover

ROA

2014

3.0%

X

2.941

8.824%

2015

6.8%

X

1.931

13.103%

2016

6.0%

X

3.472

20.833%

2016

2015

2014

2013

2012

sales

1000

501

700

313

302

net income

60

34

21

29

24

total assets

308

268

252

224

206

2016

2015

2014

2013

2012

requirement -1

sales

231%

66%

132%

4%

100%

net income

150%

42%

-13%

21%

100%

total assets

50%

30%

22%

9%

100%

requirement-2

net income

- preferred dividend

/

net sales

= return on sales

2014

21

0

/

700

3.0%

2015

34

0

/

501

6.8%

2016

60

0

/

1000

6.0%

requirement-3

net sales

/

average assets = (opening balance+closing balance)/2

2014

700

/

238

2.941

2015

502

/

260

1.931

2016

1000

/

288

3.472

requirement-4

rate of return on sales

X

Asset turnover

ROA

2014

3.0%

X

2.941

8.824%

2015

6.8%

X

1.931

13.103%

2016

6.0%

X

3.472

20.833%

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