What is the company return on assets or earning power

Reference no: EM132830480

Question - Stoney Mason, Inc., has sales of Rs.6 million, a total asset turnover ratio of 6 for the year, and net profits of Rs.120,000.

a. What is the company's return on assets or earning power?

b. The company is considering the installation of new point-of-sales cash registers throughout its stores. This equipment is expected to increase efficiency in inventory control, reduce clerical errors, and improve record keeping throughout the system. The new equipment will increase the investment in assets by 20 percent and is expected to increase the net profit margin from 2 to 3 percent. No change in sales is expected. What is the effect of the new equipment on the return on assets ratio or earning power?

Reference no: EM132830480

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