Question

Metlock Inc., a fertilizer company based in Alberta, had the following information on its financial statements...

Metlock Inc., a fertilizer company based in Alberta, had the following information on its financial statements for the fiscal years ended December 31. All figures are in millions of dollars.

2022 2021 2020 2019
Net sales $16,210 $15,759 $16,882 $15,380
Profit 715 1,303 1,498 1,335
Total assets 17,252 15,955 14,378 13,280

a) Calculate Metlock's (1) asset turnover ratio, and (2) return on assets ratio for 2020 through 2022. (Round answers to 2 decimal places, e.g. 52.75.)

2022 2021 2020
Asset turnover ratio times times times
Return on assets ratio % % %

b)

Determine from the results obtained in part (a) if Metlock’s:

(1) Asset turnover ratio from 2021 to 2022.
(2) Asset turnover ratio from 2020 to 2021.
(3) Return on assets ratio from 2021 to 2022.
(4) Return on assets ratio from 2020 to 2021.

Options for part b) : 1. Stayed the same

2. improved

3. deteriorated

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Answer #1

a) Calculate Metlock's (1) asset turnover ratio, and (2) return on assets ratio for 2020 through 2022. (Round answers to 2 decimal places, e.g. 52.75.)

2022 2021 2020
Asset turnover ratio 16210/16603.50 = 0.98 times 15759/15166.50 = 1.04 times 16882/13829 = 1.22 times
Return on assets ratio 715/16603.50 = 4.31 % 1303/15166.50 = 8.59% 1498/13829 = 10.83%

Determine from the results obtained in part (a) if Metlock’s:

(1) Asset turnover ratio from 2021 to 2022. Deteriorated
(2) Asset turnover ratio from 2020 to 2021. Deteriorated
(3) Return on assets ratio from 2021 to 2022. Deteriorated
(4) Return on assets ratio from 2020 to 2021. Deteriorated
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