INCOME STATEMENT: BALANCE SHEET AS OF 12/31/2013: $133,628.00 a) Find the asset

Question

INCOME STATEMENT:

BALANCE SHEET AS OF 12/31/2013:

$133,628.00

a) Find the asset turnover for the firm in 2013?

b) What is the equity multiplier for the firm in 2013?

c) What is the DuPont ratio for the firm in 2013?

2013 Sales $116,200.00 Cost of Goods Sold $69,720.00 Gross Margin $46,480.00 Depreciation $19,200.00 Administrative Costs $10,800.00 EBIT $16,480.00 Interest $4,000.00 Pre-tax income $12,480.00 Taxes $4,992.00 Net Income $7,488.00 Dividends $0.00 Addition to Retained Earnings $7,488.00

Explanation / Answer

Asset turonover=Sales/Assets=116200/133628=0.869578
Net profit margin=7488/116200=6.4441%
Equity multiplier, Assets/Equity=133628/57488=2.32445
RoE as per Dupont Analysis=Net profit Margin*Asset Turnover*Assets/Equity=6.4441%*0.869578*2.32445=13.0254%

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