Below Are Selected Ratios for Manufacturers Corporation A Calculate Return on Net Operating Assets for All Three

Below are selected ratios for Manufacturers Corporation. Use this information answer the
following questions. $$\begin{array}{l}\text { 田 }\\\begin{array} { | l | l | r | r | r | } \hline & & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\hline 1 . & \text { Net operating asset turnover } & 1.4 & 1.31 & 1.25 \\\hline \text { 2. } & \text { Inventory turnover } & 5.6 & 5.0 & 4.6 \\\hline 3 . & \text { Accounts receivable turnover } & 12.1 & 11.9 & 12.1 \\\hline 4 . & \text { Fixed assets turnover } & 1.3 & 1.29 & 1.29 \\\hline 5 . & \text { Net operating profit margin } & 4.5 \% & 4.6 \% & 4.8 \% \\\hline \text { 6. } & \text { Net operating assets/equity } & 2.10 & 1.98 & 1.77 \\\hline \text { 7. } & \text { EBIT/revenues } & 8.9 \% & 8.6 \% & 8.6 \% \\\hline 8 . & \text { Gross margin } & 20.1 \% & 19.9 \% & 19.8 \% \\\hline \text { 9. } & \text { Income tax rate } & 35 \% & 35 \% & 35 \% \\\hline\end{array}\end{array}$$
a. Calculate return on net operating assets for all three years. Identify reasons for any changes.
b. Calculate return on equity for all three years. Comment on changes.