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 $3 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	2			Fixed assets turnover	6
Debt-to-capital ratio	18	%		Total assets turnover	3
Times interest earned	7			Profit margin	2.25	%
EBITDA coverage	7			Return on total assets	6.75	%
Inventory turnover	8			Return on common equity	14.40	%
Days sales outstandinga	23	days		Return on invested capital	12.10	%
aCalculation is based on a 365-day year.

Balance Sheet as of December 31, 2021 (millions of dollars)
Cash and equivalents	$	88		Accounts payable	$	57
Accounts receivables		72		Other current liabilities		21
Inventories		191		Notes payable		46
Total current assets	$	351		Total current liabilities	$	124
				Long-term debt		31
				Total liabilities	$	155
Gross fixed assets		278		Common stock		129
Less depreciation		114		Retained earnings		231
Net fixed assets	$	164		Total stockholders' equity	$	360
Total assets	$	515		Total liabilities and equity	$	515

Income Statement for Year Ended December 31, 2021 (millions of dollars)
Net sales	$	905.00
Cost of goods sold		780.00
Gross profit	$	125.00
Selling expenses		69.50
EBITDA	$	55.50
Depreciation expense		12.00
Earnings before interest and taxes (EBIT)	$	43.50
Interest expense		4.50
Earnings before taxes (EBT)	$	39.00
Taxes (25%)		9.75
Net income	$	29.25

1. Calculate the following ratios. Do not round intermediate calculations. Round your answers to two decimal places.

	Firm	Industry Average
Current ratio		2
Debt to total capital	%	18	%
Times interest earned		7
EBITDA coverage		7
Inventory turnover		8
Days sales outstanding	days	23	days
Fixed assets turnover		6
Total assets turnover		3
Profit margin	%	2.25	%
Return on total assets	%	6.75	%
Return on common equity	%	14.40	%
Return on invested capital	%	12.10	%

1. Construct a DuPont equation, and the industry. Do not round intermediate calculations. Round your answers to two decimal places.

	Firm	Industry
Profit margin	%	2.25%
Total assets turnover		3
Equity multiplier