Find the return on equity -roe

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NFEC Use the last two fiscal years financial statements of the publicly-traded company you selected and calculate the following financial ratios:

o Calculate the profit margin (net income/net sales) and asset turnover (net sales/total assets) to compute the return on assets (ROA). Now introduce the equity multiplier (total assets/total equity) to find the return on equity (ROE).

o On the basis of your calculations, describe how each of the three components (profit margin, asset turnover, and leverage) contributed to the change in your company's ROA and ROE. Which component(s) contributed the most to the change in ROA? Which contributed the most to the change in ROE?

o Explain if these changes are fundamentally healthy for the company.

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