Problem
Alpha Enterprises has the following comparative balance sheets and income statements
|
Statement of Financial Position
Income Statement
for the year ending
December 31, X2
|
|
|
Dec 31, X2
|
Dec 31, X1
|
Revenues
|
$100.0
|
|
Total Assets
|
$120
|
$100
|
Operating expenses
|
80.0
|
|
Total Liabilities
|
70
|
60
|
Interest Expense
|
6.0
|
|
Shareholders' equity
|
50
|
40
|
Income before Taxes
|
14.0
|
|
|
|
|
Tax Expense (30%)
|
4.2
|
|
|
|
|
Net Income
|
9.8
|
What is the Profit Margin ratio used in ROA?
0.13
0.14
0.20
0.091