1. For the years 2021, 2022, and projected in 2023, calculate the net profit margin, operating profit margin, return on assets (ROA), and return on equity (ROE). What can you say about these ratios?

2. Calculate the projected inventory turnover, days of sales outstanding, (DSO; use 365 days), fixed assets turnover, and total assets turnover. How does NewPorte's projected utilization of assets stack up against other firms in its industry?

3. Calculate the current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company's liquidity position and its trend?

4. Calculate the projected debt ratio, and times-interest-earned. How does NewPorte compare with the industry with respect to financial leverage? What can you conclude from these ratios?

5. Calculate the projected price/earnings ratio and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company?

6. Use the extended DuPont equation, (Profit margin, Asset Turnover, Equity Multiplier), to provide a summary and overview of NewPorte's projected financial condition. What are the firm's major strengths and weaknesses?

\begin{tabular}{|lrrr|} \hline Additional Information & \multicolumn{1}{c}{} & \multicolumn{1}{c|}{ Projection } \\ \cline { 2 - 4 } Year-end common stock price & \multicolumn{1}{c}{60} & \multicolumn{1}{c}{50} & \multicolumn{1}{c|}{60} \\ Shares outstanding (millions) & 100 & $30.00 & $49.00 \\ Common dividends (millions) & $90 & $84 & 100 \\ Tax rate & 25% & 25% & $100 \\ Additions to retained earnings (millions) & $279 & $180 & $290 \\ Lease payments (millions) & $20 & $20 & $20 \\ & & & \\ \hline \end{tabular} \begin{tabular}{lr|} Ratio Analysis & IndustryAverage \\ \hline Profit margin & 7.2% \\ Operating profit margin & 10.4% \\ Basic earning power & 15.6% \\ ROA & 10.8% \\ ROE & 15.4% \\ Inventory turnover & 9.0 \\ Days sales outstanding & 28.0 \\ Fixed assets turnover & 3.0 \\ Total assets turnover & 1.5 \\ Current & 2.5 \\ Quick & 1.9 \\ Debt ratio & 15.0% \\ Debt-to-equity ratio & 0.22 \\ Liabilities-to-assets ratio & 32.0% \\ Earnings multiplier & 1.5 \\ TIE & 13.0 \\ EBITDA coverage & 17.2 \\ Price/earnings (P/E) & 16.8 \\ Market/book & 2.7 \end{tabular}