1.Compute the following ratios for two years. You may use Excel to compute your ratios. (all these formulas should be bases on the company you picked, in this case (Johnson & Johnson) use numbers from balance sheet and income statements found online.

Debt ratio

Gross profit margin

Free cash flow

Times interest earned

Accounts receivable turnover

Inventory turnover

2.Prepare a DuPont Analysis of ROE for two years, including computations of

Return on Sales

Asset Turnover

Return on Assets

Financial Leverage

Return on Equity

3.Briefly evaluate the ratio trends. Indicate on your worksheet whether each ratio is:

stronger / weaker

quicker /slower

more / less liquid

more / less risk