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The DuPont equation shows the relationships among asset management, debt management, and

-Select-liquiditymarketprofitabilityCorrect 1 of Item 1 ratios. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation is:

Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. -Select-QuantitativeQualitativeForeignCorrect 2 of Item 1 factors also need to be considered.

Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below.

Balance Sheets:
	2018	2017
Cash and equivalents	$90	$75
Accounts receivable	275	300
Inventories	375	350
Total current assets	$740	$725
Net plant and equipment	2,000	1,490
Total assets	$2,740	$2,215
Accounts payable	$150	$85
Accruals	75	50
Notes payable	140	165
Total current liabilities	$365	$300
Long-term debt	450	290
Common stock	1,225	1,225
Retained earnings	700	400
Total liabilities and equity	$2,740	$2,215

Income Statements:
	2018	2017
Sales	$2,000	$1,500
Operating costs excluding depreciation	1,250	1,000
EBITDA	$750	$500
Depreciation and amortization	100	75
EBIT	$650	$425
Interest	62	45
EBT	$588	$380
Taxes (40%)	235	152
Net income	$353	$228
Dividends paid	$53	$48
Addition to retained earnings	$300	$180
Shares outstanding	100	100
Price	$25.00	$22.50
WACC	10.00%

What is the firms 2018 current ratio? Round your answer to two decimal places.

The 2018 current ratio indicates that Rosnan has -Select-insufficientsufficientCorrect 1 of Item 3current assets to meet its current obligations as they come due. What is the firms 2018 total assets turnover ratio? Round your answer to four decimal places.

Given the 2018 current and total assets turnover ratios calculated above, if Rosnans 2018 quick ratio is 1.0 then an analyst might conclude that Rosnans fixed assets are managed -Select-efficientlyinefficientlyCorrect 1 of Item 4. What is the firms 2018 debt-to-capital ratio? Round your answer to two decimal places. %

If the industry average debt-to-capital ratio is 30%, then Rosnans creditors have a -Select-smallerbiggerCorrect 1 of Item 5 cushion than indicated by the industry average. What is the firms 2018 profit margin? Round your answer to two decimal places. %

If the industry average profit margin is 12%, then Rosnans lower than average debt-to-capital ratio might be one reason for its high profit margin. -Select-TrueFalseCorrect 1 of Item 6

What is the firms 2018 price/earnings ratio? Round your answer to two decimal places.

Using the DuPont equation, what is the firms 2018 ROE? Round your answer to two decimal places. %

Durant quaties terminagement Management on the town ving the per ROE Protarghe Tove Equip Antenas endast time thony de Stad Quantitate Pro 2017 om te Richter cond to be ca. 100 LO Chand AL 393 275 315 1210 2.000 17.140 75 100 150 713 1,400 22 23 re NW A 130 1 M 10 30 20 COS Lot Coro 1.215 MO 32115 Income state 2150 1104 REGTE O Analysis of Financial Statements. Practice Problems buru 303 Long-term det 450 Common stock 1,225 Reted earning 200 Totalt and equity $2,740 JUU 290 1.225 400 $2,215 Income Statements! Soes Operating costs excluding depreciation EBITDA Depreciation and amortization 2018 $2,000 1,250 $750 100 $650 62 3500 235 $353 2017 $1,500 1,000 $500 25 5425 45 SHO 152 3220 Interest PAT Taxes (404) Not income Dividends said Antion to retained earnings 553 1.300 10 $180 Shares standing Price WACC 100 135.00 10.00% 100 $22.50 What is the 2018 current ratio Round your answer to two decimal places The 2018 current indicates that Roshanas Select current assets to meet its current obligations as they come due What is the form 2018 total assets turnover ratio Round your anwer to four decimal places Given the 2018 current and total assets turnover ratios calculated above, Rosinan's 2011 quick rate is 10 then an analyst might conclude that Rosa's fixed assets are managed Select What is the firm's 2018 tto capital ratio Round your answer to twefecimal places Share on Price WACC 100 5:35 DO 10.00 100 122.50 What is the 2016 current stand your answers oma The 2015 current indicate that we wount to meet its current or they come due What is firmostatumovers? Hound your answer to four decimal port Gen 2018 current and to turnoverbios colated above, if Ronan 2011 komen en conclude the bed assets are managed Select what in the Tiema 2016 dett-to-captat rata? Round your answer to two decimat aces. ut the industry average cute-to-capitul reso n. 206, then Rouman's creation have selety cunnion then ndicated by the industry werage What the 2018 pro margin Mound your answer to two decine places In the motraverage profit margin 12 the Rosarelower than average decopelo Decreason for the profit margin Select what is the times 2018 price/arrang ratio Round your aromer to two decimal places Guing the durant equation what is the 2018 HOET Round your answer to two decace Check My Washining che si factors and to be considered DuPont equation show me this among sanagement, et management, and elect vratio Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equations ROE Profit marginx Total Mets turnover x Equity multiple to any important to understand and interpret financial statements, however, sound financial analysis involves more than just calculating and interpreting numbers. See cantitative Problem Rosinan tot 2055 2017 balance sheets and income statements are shown below Balance Sheets: 2018 2017 dients 590 75 sed 275 300 ventores 375 350 Test current 5740 $25 aut plant and equipment 2,000 1,490 stalas 52,740 2.215 accounts payable cu Notes payable Total current Long term Common stoc Retained earings Totalities and out $150 25 140 2365 450 1,225 700 $2,70 585 50 165 $300 299 1.225 400 52,215 Income Statements 2017 2010 12.000 Sole $1,500 Retained earnings Total liabilities and equity 1,225 700 $2,740 1,225 400 $2,215 Income Statements: Sales Operating costs excluding depreciation EBITDA Depreciation and amortization EBIT Interest EBT Taxes (40%) Net Income 2018 $2,000 1,250 $750 100 $650 2017 $1,500 1,000 $500 75 $425 45 62 $588 $380 152 235 $353 $228 Dividends paid Addition to retained earnings $53 $300 $48 $180 Shares outstanding Price WACC 100 $25.00 10.00% 100 $22.50 What is the firm's 2018 current ratio? Round your answer to two decimal places. The 2018 current ratio indicates that Rosnan has -Select- current assets to meet its current obligations as they come due What is the firm's 2018 total assets turnover ratio? Round your answer to four decimal places. 100 Shares outstanding Price WACC 100 $25.00 10.00% $22.50 What is the firm's 2018 current ratio7 Round your answer to two decimal places The 2018 current ratio indicates that Rosnan hasi Select current assets to meet its current obligations as they come due What is ther's 2018 total assets tumover ratio? Round your answer to four decimal places Given the 2018 current and total assets turnover ratios calculated above, Roshan's 2018 quick ratio is 10 then an analyst might conclude that Rosas fixed assets are managed Select What is the firm's 2018 debt-to-capital ratio? Round your answer to two decimal places. it the industry average ott-to-capital ratios 30%, then Roshan's creditors have a select cushion than indicated by the industry average Wat is the noms 2018 profit margin? Round your answer to two decimal places. it the industry wwwrege profit marginis 12%, then Roshan's lower than average debt-to-capital ratio might be one reason for its high prontmargin Select- What is the firm's 2018 pnce/earings ratio Round your answer to two som places Using the DuPont equation, what is the firm's 2018 ROE Round your answer to two decimal places Om for

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