The D. H. Muller Company presented the income statement in its 2001 annual report shown on the next page.

Required

a. Based on these data, compute the following for 2001, 2000, and 1999:

1. Net profit margin 6. Return on operating assets (using 2. Return on assets (using end-of-year operating assets)

total assets) 7. Operating asset turnover (using 3. Total asset turnover (using end-of-year operating assets)

total assets) 8. DuPont analysis with 4. DuPont analysis operating ratios 5. Operating income margin 9. Gross profit margin

b. Discuss your findings.

(Dollars in thousands except For the Years Ended per-share amounts) 2001 2000 1999 Net sales $297,580 $256,360 $242,150 Cost of sales 206,000 176,300 165,970 Gross profit 91,580 80,060 76,180 Selling, administrative, and other expenses 65,200 57,200 56,000 Operating earnings 26,380 22,860 20,180 Interest expense (5,990) (5,100) (4,000)
Other deductions, net (320) (1,100) (800)
Earnings before income taxes, minority interests, and extraordinary items 20,070 16,660 15,380 Income taxes (8,028) (6,830) (6,229)
Net earnings of subsidiaries applicable to minority interests (700) (670) (668)
Earnings before extraordinary items 11,342 9,160 8,483 Extraordinary items:
Gain on sale of investment, net of federal and state income taxes of $520 — 1,050 —
Loss due to damages to South American facilities, net of minority interest of $430 — (1,600) —
Net earnings $ 11,342 $ 8,610 $ 8,483 2001 2000 1999 Earnings per common share:
Earnings before extraordinary items $2.20 $1.82 $1.65 Extraordinary items — (.06) —
Net earnings $2.20 $1.76 $1.65 The asset side of the balance sheet is summarized as follows:
(Dollars in thousands) 2001 2000 1999 Current assets $ 89,800 $ 84,500 $ 83,100 Property, plant, and equipment 45,850 40,300 39,800 Other assets (including investments, deposits, deferred charges, and intangibles) 10,110 12,200 13,100 Total assets $145,760 $137,000 $136,000