1. Suppose you are asked to analyze stock A for a possible purchase. Using Dupont analysis would you recommend this purchase? Why or Why not? Specifically what areas might need some improvement? [Recall that EBIT-interest = EBT and EBT - Taxes = Net Income] Firm A Industry P/E ratio 15 15 Return on Equity 25% 25% Total Assets $150 million $432 million Net Income $30 million $60 million Interest expense $10 million $30 million Tax rate 35% 35% Sales $300 million $700 million Leverage or Equity Multiplier 1.25 1.8