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2. Based on the following financial ratios, calculate ROE and ROA. (10pts) Profit margin = Net income / Sales =10% Total debt ratio = Total

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2. Based on the following financial ratios, calculate ROE and ROA. (10pts) Profit margin = Net income / Sales =10% Total debt ratio = Total liabilities / Total assets =50% Sales-to-Inventory turnover = Sales / Inventory =10 times Current ratio = Current assets / Current liabilities =1.5 times Inventory (-to-Current liabilities) ratio = Inventory / Current liabilities =1 times Inventory proportion = Inventory / Total assets =10% Fixed asset turnover = Sales / Net fixed assets =1.33 times ROE = Net income / Total equity =?% ROA = Net income / Total assets =?% Hint. modify the following DuPont Identity: ROE =( Net income / Sales )( Sales / Total assets )( Total assets / Total equity )

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