1)

Amount In Millions	2018	2017
Total Assets	86.92	58.76
Total Owners Equity	33.67	23.94
Sales	28.04	33.16
Net Income	6.00	7.30

1. Knowing that 2017 was a very normal year and that in 2018 the firm had few unusual events, discuss the performance of LaRouge for 2018 and 2017 using the ROA and ROE

2. You have been hired as a financial analyst by LaRouge LTD. Use the DuPoint Identity to break down the ROE into its components. Which one of those components is driving the companys 2018 ROE (compared to 2017)?

3. Among these actions, recommend the best two (and only two) to LaRouge in order to have their ROE back to its normal 2017 level. Explain your choices.

Action 1: Offer better training to the sales force to efficiently use the companys assets.

Action 2: Consider a new production system that could potentially reduce the cost of goods sold.

Action 3: Retain less earnings for the year and adjust shareholders equity accordingly.

Action 4: Reassess the use of assets of LaRouge and replace or eliminate any obsolete, not fully used, or unnecessary asset.