Consider the following information for Vulcan Stores for 2005 and 2006.

2005 2006

Total assets $ 80,000,000 $ 90,000,000

Noninterest – bearing current liabilities 7,000,000 8,000,000

Net Income 6,000,000 8,000,000

Interest Expense 4,000,000 5,000,000

Sales 120,000,000 180,000,000

Tax rate 35% 35%

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 2005 and 2006.