P3–26 DuPont system of analysis Use the following ratio information for Johnson International and the industry averages for Johnson’s line of business to:

a. Construct the DuPont system of analysis for both Johnson and the industry.

b. Evaluate Johnson (and the industry) over the 3-year period.

c. Indicate in which areas Johnson requires further analysis. Why?

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Johnson 2013 2014 2015 Financial leverage multiplier 1.75 1.75 1.85 Net profit margin 0.059 0.058 0.049 Total asset turnover 2.11 2.18 2.34 Industry averages Financial leverage multiplier 1.67 1.69 1.64 Net profit margin 0.054 0.047 0.041 Total asset turnover 2.05 2.13 2.15