Profit margin and investment turnover

Question

Task:

Consider the following information for HandyCraft Stores for 2011 and 2012.

                                                              2011              2012
Total assets                                     $45,000,000      $51,300,000
Noninterest-bearing current liabilities     4,000,000         4,500,000
Net income                                          3,500,000         4,500,000
Interest expense                                  2,200,000         2,700,000
Sales                                                 60,000,000       87,500,000
Tax rate                                                   40%                40%

Required

a. Compute ROI for both years.

b. Break ROI down into profit margin and investment turnover.

c. Comment on the change in financial performance between 2011 and 2012.