The Following Information Was Taken from the Income Statement and Balance

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The Answer is To compute the financial ratios for The Mickey Company for the year 2011, we will use the information provided from the income statement and balance sheet. The ratios we will calculate are the Net Profit Margin, Asset Turnover, and Return on Assets.1. Net Profit Margin:
The Net Profit Margin is calculated by dividing Net Income by Sales Revenues and then multiplying by 100 to get a percentage.

ext{Net Profit Margin} = \left( \frac{ ext{Net Income}}{ ext{Sales Revenues}} ight) imes 100

For 2011:

ext{Net Profit Margin} = \left( \frac{2,345}{30,752} ight) imes 100

ext{Net Profit Margin} = (0.0762) imes 100

ext{Net Profit Margin} = 7.62\%

2. Asset Turnover:
The Asset Turnover ratio measures how efficiently a company uses its assets to generate sales and is calculated by dividing Sales Revenues by Total Assets.

ext{Asset Turnover} = \frac{ ext{Sales Revenues}}{ ext{Total Assets}}

For 2011:

ext{Asset Turnover} = \frac{30,752}{53,902}

ext{Asset Turnover} = 0.5706

3. Return on Assets (ROA):
The Return on Assets ratio indicates how profitable a company is relative to its total assets and is calculated by dividing Net Income by Total Assets.

ext{Return on Assets} = \left( \frac{ ext{Net Income}}{ ext{Total Assets}} ight) imes 100

For 2011:

ext{Return on Assets} = \left( \frac{2,345}{53,902} ight) imes 100

ext{Return on Assets} = (0.0435) imes 100

ext{Return on Assets} = 4.35\%

In summary, for the year 2011, The Mickey Company had a Net Profit Margin of 7.62%, an Asset Turnover of 0.5706, and a Return on Assets of 4.35%.

The Following Information Was Taken from the Income Statement and Balance

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The Following Information Was Taken from the Income Statement and Balance

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