PE 6-7A Ratio of net sales to assets
The following financial statement data for years ending December 31 for Foodworks Company are shown below.
|
2012 |
2011 |
|
|
Net sales |
$880,000 |
$787,500 |
|
Total assets: |
||
|
Beginning of year |
500,000 |
375,000 |
|
End of year |
600,000 |
500,000 |
a. Determine the ratio of net sales to assets for 2012 and 2011.
b. Does the change in the ratio of net sales to assets from 2011 to 2012 indicate a favorable or an unfavorable trend?