Question

The profit margin and return on assets of each segment, explaining any significant changes that are...

The profit margin and return on assets of each segment, explaining any significant changes that are evident:

Return on Assets: 2019 - 97.89; 2018 - 94.42

Profit margin: 2019 - 3.7%; 2018 - 3.1%

Business   Accounting   
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Answer #1

Answer : The significant changes that are evident from the presented data is as follows:

1. Return on Assets 2018 2019

Percentages   94.42 97.89

Explanation From the data present we have concluded that -

  • Return on Assets is increasing
  • It indicates the amount of money earned per dollar of assets
  • It is an indication of increasing profitability of business

2. Profit margin:    2018 2019  

Percentages 3.1    3.7

Explanation: From the data present we have concluded that -

  • Profit margin is increasing
  • A higher profit margin indicates that a company is more efficient in converting their sales into actual profit
  • It is a good indicator for it's future growth.
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