Ratio of net sales to assets
The following financial statement data for years ending December 31 for Edison Company are shown below.
|
2014 |
2013 |
|
|
Net sales |
$1,884,000 |
$1,562,000 |
|
Total assets: |
||
|
Beginning of year |
770,000 |
650,000 |
|
End of year |
800,000 |
770,000 |
a. Determine the ratio of net sales to assets for 2014 and 2013.
b. Does the change in the ratio of net sales to assets from 2013 to 2014 indicate a favorable or an unfavorable trend?