Financial ratios: Profitability. The financial statements for Tyler Toys, Inc. a

Question

Financial ratios: Profitability. The financial statements for Tyler Toys, Inc. are shown in the popup window: 1. Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? 8. What is the profit margin for 2014? % (Round to two decimal places.) What is the profit margin for 2013? % (Round to two decimal places.) What is the return on assets for 2014 % (Round to two decimal places.) What is the return on assets for 2013? 96 (Round to two decimal places.) What is the return on equity for 2014? % (Round to two decimal places.) What is the return on equity for 2013? % (Round to two decimal places.) Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? (Select the best response.,) O A. These ratios indicate a somewhat weak firm performance for the equity holders with an ROE of O B. These ratios indicate a somewhat strong firm performance for the equity holders with an ROE of ° C. These ratios indicate a somewhat weak firm performance for the equity holders with an ROE of 0 D. These ratios indicate a somewhat strong firm performance for the equity holders with an ROE of over 43.02% for 2014. over 43.02% for 2013 over 43.02% for 2013. over 43.02% for 2014. 1: Data Table hitps://xlitemprod peasoncmg.com/apiv1/print/en-us finance 1/2

Explanation / Answer

1) Profit margin for 2014 = Net income / Revenue = 1753625 / 14147341 = 12.39%

2) Profit margin for 2013 = Net income /Revenue = 1627895 / 13566181 = 11.99%

3) Return on assets for 2014 = Net income / Total assets = 1753625 / 14685571 = 11.94%

4) Return on assets for 2013 = Net income / Total assets = 1627895 / 14118743 = 11.53%

5) Return on equity for 2014 = Net income / Total equity = 1753625 / 4076708 = 43.0%

6) Return on equity for 2013 = Net income / Total equity = 1627895 / 4379582 = 37.2%

MCQ question:

The correct option is Option D.

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