Step 4 Prepare an analysis and discussion of the financial ratio data that are examined in the.

Step 4 Prepare an analysis and discussion of the financial ratio data that are examined in the Financial Ratio Analysis Model.

Reasons forincreasingROAor improvement in ROA indicatesbetterprofitability.Improvement in return on assets may be due to increase in net income withoutacquiringneassets. Itis also possible that efficiency of existing assets may have been improved
Return on Equity may beimproveddue to severalreasons. One of thereasonsisincreaseinprofits. SomeOther reasonsinclude: -Buy Back of shares by the company.
Reasons for decrease in ROI may be decrease in sales, increase in operating expenses and increase in the amount of operating assets in the segment. Therefore deteriorated ROI can be improvedby:

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Step 4 Prepare an analysis and discussion of the financial ratio data that are examined in the

 
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