6 of 20 6 of 20 Questions Question Conduct a DuPont analysis to explain the change in Blockbusters profitability from Year 1 to Year 2. Which of the following is the best explanation for the change in ROE? (Ignore factors that make minor contributions, i.e., less than 10%.) Blockbuster Inc. as of December 31st ($ 000's) Year 1 Year 2 Revenue $ 4,969,100 $ 5,157,600 Cost of goods sold 2,036,000 2,420,700 SG&A 2,390,600 2,532,400 Depreciation & amortization 459,100 422,700 EBIT 83,400 -218,200 Interest expense 116,500 78,200 Income before tax -33,100 -296,400 Income tax expense 45,400 -56,100 Net income $ -78,500 $ -240,300 ASSETS Year 1 Year 2 Cash $ 194,200 $ 200,200 Accounts receivable 185,800 150,000 Inventory 242,200 202,900 Other 177,300 163,300 Total current assets 799,500 716,400 Long term investments 214,100 159,500 Property, plant, and equipment (net) 1,079,400 909,000 Goodwill 6,455,900 5,967,500 Total assets $ 7,749,400 $ 7,036,000 Accounts payable $ 1,090,400 $ 1,087,400 Short-term debt 32,800 181,400 Total current liabilities 1,123,200 1,268,800 Long-term debt 1,417,300 734,900 Total liabilities $ 2,540,500 $ 2,003,700 Shareholders' equity Common stock 6,095,200 6,075,800 Retained earnings -86,800 -327,100 Total stockholder equity 6,008,400 5,748,700 Total liabilities and shareholders' equity $ 8,548,900 $ 7,752,400 Responses total asset turnover (asset efficiency) total asset turnover (asset efficiency) net profit margin (margins) net profit margin (margins) equity multiplier (leverage) equity multiplier (leverage) net profit margin, total asset turnover, and leverage net profit margin, total asset turnover, and leverage net profit margin and total asset turnover