The following are financial ratios for the company. You are required to answer the following questions. Year 5 Year 6 Ye

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The following are financial ratios for
the company. You are required to answer the following
questions.
Year
5
Year 6
Year 7
ROA
2.87%
2.60%
4.13%
Profit Margin
3.2%
2.9%
3.1%
Assets Turnover
0.90
0.88
0.99
Accounts receivable Turnover
6.2
11.5
118.4
Inventory Turnover
6.1
6.0
5.8
Fixed Assets Turnover
1.3
1.4
1.5
collection period
58.6
31.7
3.1
inventory period
59.6
60.9
62.5
%change in sales
-
7.66%
9.68%
1. Why did profit margin increase in year 7?