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    Profit Margin for the Year

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    An analyst finds that, for a firm reporting a return on net operating assets of 19 percent, the asset turnover had declined from 2.2 to 1.9.

    a) Calculate the profit margin for the year.
    b) What does the decrease in the asset turnover tell you about the likelihood of the 19 percent RNOA being maintained in the future?

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    Solution Summary

    The solution calculates the profit margin and the asset turnover.