Question

CALCULATOR PRINTER VERSION BACK NE Exercise 9-16 Lymen International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring. The new products are a significant step up in quality above the company's current offerings, but offer a complementary fit to its existing product line. Fred Riddick, senior production department manager, is very excited about the high-tech new equipment that will have to be acquired to produce the new products. Barbara Dyson, the company's CFO, has provided the following projections based on results with and without the new products. Without New Products With New Products. Sales revenue $12,333,000 $16,952,400 Net income $459,000 $867,900 Average total assets $5,251,700 $13,964,700 (a) Compute the company's return on assets, profit margin, and asset turnover, both with and without the new product line. (Round answers to 0 decimal places, e.g. 2% and asset turnover to 1 decimal place, e.g. 6.2) Without new products With new products Return on assets 1222 AM search 11/24/2019

Answer 1

	Without New Products	With New Products
Return on Assets [Net Income/Average Total Assets]	8.74%	6.21%
	[($459,000/$5,251,700)*100]	[($867,900/$12,964,700)*100]
Profit Margin [Net Income/Sales Revenue]	3.72%	5.12%
	[($459,000/$12,333,000)*100]	[($867,900/$16,952,400)*100]
Asset Turnover [Sales Revenue/Average Total Assets]	2.35	1.31
	[($12,333,000/$5,251,700)*100]	[($16,952,400/$12,964,700)*100]