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The DuPont equation shows the relationships among asset management, debt management and ratios. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation ROE Profit margin x Total et quidity Equity multiplier to analysis is important to understand and interpret financial statements howsound financl factors also need to be consider olves more than just calculating and terpreting numbers Quantitative Problem hann Ratio analysis is important to understand and interpret financial statements; however, sound financial analyst wolves more than just calculating and interpreting sumbers and factors also need to be considered Quantitative Problemu Rosnan Industries 2019 and 2018 balance sheets and income statements are shown below Select Balance Sheets 2019 2018 Gustave Cach and equivalent 110 95 2.75 300 Account Invento 2019 2018 Cash and equivalents $ 110 95 Accounts receivable 275 300 Inventories 375 350 Total current assets $ 760 $ 745 Net plant and equipment 2,000 1,490 Total assets $2,760 $2,235 Accounts payable $ 150 $ 85 Accruals 75 50 Notes payable Total current liabilities 160 185 $ 385 $ 320 Long-term debt 450 290 Common stock 1,225 1,225 Retained earnings 700 400 Total liabilities and equity $2,760 $2,235 Income Statements: 2019 2018 Sales $1,885 $1,425 Operating costs excluding depreciation 1,250 1,000 EBITDA $ 635 $ 425 Depreciation and amortization 100 75 EBIT $ 535 $ 350 Interest 63 46 EBT $ 472 $ 304 Taxes (25%) 118 76 Net income $ 354 $ 228 Dividends paid 54 3 18 Addition to retained earnings $300 $180 Share outstanding 100 100 Price WACC $25.00 $22.50 10.00 What is the firm's 2019 current ratio Round your answer to two decimal places The 2019 current ratio indicates that Rostan has relec v current assets to meet its current obligations as they come due What is the firm's 2019 total nuts turnover ratio Round your answer to four deomal places Given the 2019 current and total assets turnover ratios calculated above, if Ronal's 2019 wick ratios 1.0 then an analyst might conclude that many feed assets are managed flect What is the fom 2019 debt-to-capital catie Round your answer to two decimal places Ir the industry average debt to copiat ratio then Roman's creditors have accushion than indicated by the industry average. What is the form 2019 profit margin Round your answer to two decimal places If the industry average profit margin 134, then Rowan's lower the average debt-to-capital at might be one reason for its high profit marginant w What is the firm's 2019 price/carrings ratio? Round your answer to two decimal places Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places. %

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