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Net Profit Margin
Total Assets Turnover
Return on Assets
I think you based on the financial ratios,
The above ratios show that the company has been running its operation neither efficiently or effectively. The net profit margin ratios have been calculated by considering net income and total revenues for each year; the assets turnover has been calculated using total revenues and total assets. The return on assets has been calculated by multiplying net profit margin and assets turnover. The net profit margin represents net income earned after deducting all expenses from revenue, the negative profit margin in each of the year shows that company has been incurring more expenses as compared to total revenues, however, it could reduce its negative profit margin from 255.41% to 43.51% in three years time period. The assets turnover was very low in 2006 and increase to 2.35 in 2008 which shows that the company has been running its operation more efficiently in the later year, but because of the negative profit margin the return on the assets was in the negative percentage and due to this negative profit margin the negative return on asset is higher due to higher assets turnover in 2008. It means that if the net profit margin is in negative the excessive use of assets will result in negative return on assets. These ratios were selected as it shows the efficient and effective use of total assets.
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