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 $1 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

3

Fixed assets turnover

6

Debt-to-capital ratio

17

%

Total assets turnover

3

Times interest earned

7

Profit margin

3.75

%

EBITDA coverage

10

Return on total assets

11.25

%

Inventory turnover

7

Return on common equity

13.00

%

Days sales outstanding^a

33

days

Return on invested capital

12.00

%

^aCalculation is based on a 365-day year.

Balance Sheet as of December 31, 2021 (millions of dollars)
Cash and equivalents	$	87		Accounts payable	$	46
Accounts receivables		99		Other current liabilities		12
Inventories		226		Notes payable		58
Total current assets	$	412		Total current liabilities	$	116
				Long-term debt		29
				Total liabilities	$	145
Gross fixed assets		313		Common stock		145
Less depreciation		145		Retained earnings		290
Net fixed assets	$	168		Total stockholders' equity	$	435
Total assets	$	580		Total liabilities and equity	$	580

Income Statement for Year Ended December 31, 2021 (millions of dollars)
Net sales	$	895.00
Cost of goods sold		750.00
Gross profit	$	145.00
Selling expenses		79.50
EBITDA	$	65.50
Depreciation expense		14.00
Earnings before interest and taxes (EBIT)	$	51.50
Interest expense		5.50
Earnings before taxes (EBT)	$	46.00
Taxes (25%)		11.50
Net income	$	34.50

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

	Firm	Industry Average
Current ratio		3
Debt to total capital	%	17	%
Times interest earned		7
EBITDA coverage		10
Inventory turnover		7
Days sales outstanding	days	33	days
Fixed assets turnover		6
Total assets turnover		3
Profit margin	%	3.75	%
Return on total assets	%	11.25	%
Return on common equity	%	13.00	%
Return on invested capital	%	12.00	%

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

	Firm	Industry
Profit margin	%	3.75%
Total assets turnover		3
Equity multiplier