A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial position using the DuPont equation. The firm has no lease payments but has a $2 million sinking fund payment on its debt. The most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratios Current ratio 2x Fixed assets turnover 5 Profit margin Debt-to-capital ratio 18% Total assets turnover 3x Times interest earned 7x 2.75% EBITDA coverage 8x Return on total assets 8.25% Inventory turnover 8x Return on common 12.50% equity Days sales 27 days Return on invested 10.90 % outstanding capital a Calculation is based on a 365-day year. Balance Sheet as of December 31, 2021 (millions of dollars) Cash and equivalents $ 80 Accounts payable $ 43 Accounts receivables 86 Other current liabilities 37 Inventories 182 Notes payable 43 Total current assets $ 348 Total current liabilities $123 Long-term debt 37 Total liabilities $ 160 257 Common stock 139 Gross fixed assets Less depreciation 70 236 Net fixed assets $ 187 Retained earnings Total stockholders' equity Total liabilities and equity $ 375 Total assets $ 535 $ 535 Income Statement for Year Ended December 31, 2021 (millions of dollars) Net sales $ 885.00 780100 $ 105.00 Cost of goods sold Gross profit Selling expenses EBITDA 58.50 $ 46.50 10.00 Depreciation expense Earnings before interest and taxes (EBIT) $ 36.50 Interest expense 3.50 $ 33.00 Earnings before taxes (EBT) Taxes (25%) 8.25 Net income $ 24.75 a. Calculate the following ratios. Do not round intermediate calculations. Round your answers to two decimal places. Firm Industry Average Current ratio 2x Debt to total capital % 18 % 3 Times interest earned 7x EBITDA coverage 8 x X Inventory turnover 8 x X Days sales outstanding days 27 days Fixed assets turnover 5x Total assets turnover 13x x Profit margin % 2.75 % * 3 3 3 Return on total assets % 8.25 % Return on common equity % 12.50 % Interest expense 3.50 Earnings before taxes (EBT) $ 33.00 Taxes (25%) 8.25 Net income $ 24.75 a. Calculate the following ratios. Do not round intermediate calculations. Round your answers to two decimal places. Firm Industry Average Current ratio 2x Debt to total capital % 18 % Times interest earned X 7x EBITDA coverage 8 x Inventory turnover 8x Days sales outstanding days 27 days Fixed assets turnover 5x Total assets turnover 3 x Profit margin % 2.75 % Return on total assets % 8.25 % Return on common equity 3 3 3 % 12.50 % Return on invested capital 10.90 % % b. Construct a DuPont equation, and the industry. Do not round intermediate calculations. Round your answers to two decimal places. Firm Industry Profit margin % 2.75% Total assets turnover 3 3 3 3x Equity multiplier