DuPont Analysis Relationships: Please complete the following by filling in the blanks:

A

B

C

D

Net income

$ 50.0

?

?

$ 50.0

Sales

500.0

?

?

?

Total assets

250.0

200.0

1,500.0

400.0

Liabilities

150.0

?

?

?

Equity

100.0

?

?

?

Net margin

?

6.25%

?

2.50%

Asset turnover

?

4.000

0.667

?

Return on assets

?

?

?

?

Financial leverage

?

?

2.500

1.600

Return on equity

?

50.00%

12.50%

?

B

A

Net margin = net income / sales

=

=k5/k6

=

net income / sales

net income =

Asset Turnover = sales / total assets

=

=k6/k7

=

sales / total assets

Sales =

Return on assets = net income / total asset

=k5/k7

ROA

net income / total asset

Financial leverage = total assets / equity

=k7/k9

Financial leverage

total assets / equity

Return on equity = net income / equity

=k5/k9

=

net income / equity

equity =

C

Total assets =

Liability + Equity

Liability =

Financial leverage = total assets / equity

D

Equity

=

Net margin = net income / sales

Return on equity = net income / equity

Financial leverage = total assets / equity

Asset Turnover = sales / total assets

=

Sales

=

Total assets =

Liability + Equity

Net margin = net income / sales

NM

=

Liability =

Total assets =

Liability + Equity

Asset Turnover = sales / total assets

Return on assets = net income / total asset

ROA

=

Return on assets = net income / total asset

Return on equity = net income / equity