Return on Investment, DuPont Analysis and Financial Leverage The following table presents selected 2016 financial...
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Accounting
Return on Investment, DuPont Analysis and Financial Leverage The following table presents selected 2016 financial information for Sunder Company.
| Sunder Company Selected 2016 Financial Data | |
|---|---|
| Balance Sheet: | |
| Average total assets | $1,000,000 |
| Average total liabilities | 500,000 |
| Average stockholders' equity | 500,000 |
| Income Statement | |
| Sales revenue | $1,000,000 |
| Earnings before interest (net of tax) | 20,000 |
| Interest expense (net of tax) | 15,000 |
| Net income | 5,000 |
Round answers to one decimal place (i.e., 0.0025 = 0.3%). Use negative signs with answers, when appropriate.
a. Compute Sunder's ROE, ROA, and ROFL for 2016
| ROE | Answer |
| ROA | Answer |
| ROFL | Answer |
b. Use the DuPont analysis described in the Business Insight on page 230 to disaggregate ROE.
| Net profit margin | Answer |
| Asset turnover | Answer |
| Financial leverage | Answer |
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