85%
8.85%
The next ratio used in the analysis is Return on Assets. This ratio also shows significant reduction year-over-year from $14.57% in 2008 to 10.58% in 2009, a reduction of 27%. This indicates the internal systems and processes within Shisa Wasabi are more anemic than the gross margin calculation had shown. It also indicates that the assets may be aging quickly and needing repair to continually stay at a level of deliver higher ROA year-over-year. Unfortunately for this company their ROA is declining nearly a third in just a year, which signals significant slowdowns and lack of effiencies internally.
Return on Assets Calculations
Net Profit Margin
Calculation
2009
Calculation
2008
Net Income
Total Assets
2,100 / 19,400
=.1058 = 10.58%
10.58%
2,390 / 16,400
= .1457= 14.57%
14.57%
Ret
The third financial ratio used to evaluate the potential investment in Shisa Wasabi is Return on Equity. Just as the previous two ratios showed, this also has a reduction occurring between 2008 and 2009. Dropping from 23.96%...
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