Calculate the net profit margin and the sales to total asset

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Reference no: EM131123431

The Salza Technology Corporation successfully increased its "top line" sales from $375,000 in 2009 to $450,000 in 2010. Net income also increased as did the venture's total assets. You have been asked to compare the financial performance between the two years.


A. Calculate the net profit margin and the sales-to-total-assets ratio for Salza for 2010 using average total assets. Also calculate the return on total assets in 2010 using average total assets.

B. Calculate the ratios in the ROA model for both 2009 and 2010 using year-end total assets. Comment on any financial ratio differences. 

C. Expand the 2010 ROA model discussed in Part A into an ROE model that includes financial leverage as measured by the equity multiplier. Use average owners' or stockholders' equity in your calculation.

D. Expand the 2009 and 2010 ROA model calculations in Part B into ROE models based on year-end owners' or stockholders' equityamounts.

Reference no: EM131123431

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