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	4.32x		Fixed assets turnover	7.30x
Debt-to-capital ratio	19.18%		Total assets turnover	3.42x
Times interest earned	17.25x		Profit margin	9.83%
EBITDA coverage	18.23x		Return on total assets	34.46%
Inventory turnover	10.55x		Return on common equity	51.28%
Days sales outstandinga	15.89 days		Return on invested capital	43.3%

^aCalculation is based on a 365-day year.

Balance Sheet as of December 31, 2016 (Millions of Dollars)
Cash and equivalents	$67		Accounts payable	$27
Accounts receivables	40		Other current liabilities	10
Inventories	127		Notes payable	40
Total current assets	$234		Total current liabilities	$77
			Long-term debt	17
			Total liabilities	$94
Gross fixed assets	154		Common stock	80
Less depreciation	53		Retained earnings	161
Net fixed assets	$101		Total stockholders' equity	$241
Total assets	$335		Total liabilities and equity	$335

Income Statement for Year Ended December 31, 2016 (Millions of Dollars)
Net sales	$670.0
Cost of goods sold	475.7
Gross profit	$194.3
Selling expenses	46.9
EBITDA	$147.4
Depreciation expense	19.4
Earnings before interest and taxes (EBIT)	$128.0
Interest expense	4.6
Earnings before taxes (EBT)	$123.4
Taxes (40%)	49.4
Net income	$74.0

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

   	Firm	Industry Average
   Current ratio	x	4.32x
   Debt to total capital	%	19.18%
   Times interest earned	x	17.25x
   EBITDA coverage	x	18.23x
   Inventory turnover	x	10.55x
   Days sales outstanding	days	15.89days
   Fixed assets turnover	x	7.30x
   Total assets turnover	x	3.42x
   Profit margin	%	9.83%
   Return on total assets	%	34.46%
   Return on common equity	%	51.28%
   Return on invested capital	%	43.30%

2. Construct a DuPont equation for the firm and the industry. Do not round intermediate steps. Round your answers to two decimal places.

   	Firm	Industry
   Profit margin	%	9.83%
   Total assets turnover	x	3.42x
   Equity multiplier	x	x

4. Which specific accounts seem to be most out of line relative to other firms in the industry?
   1. The accounts which seem to be most out of line include the following ratios: Inventory Turnover, Days Sales Outstanding, Fixed Asset Turnover, Profit Margin, and Return on Equity.
   2. The accounts which seem to be most out of line include the following ratios: Inventory Turnover, Days Sales Outstanding, Total Asset Turnover, Return on Assets, and Return on Equity.
   3. The accounts which seem to be most out of line include the following ratios: Current, EBITDA Coverage, Inventory Turnover, Days Sales Outstanding, and Return on Equity.
   4. The accounts which seem to be most out of line include the following ratios: Debt to Total Capital, Inventory Turnover, Total Asset Turnover, Return on Assets, and Profit Margin.
   5. The accounts which seem to be most out of line include the following ratios: Times Interest Earned, Total Asset Turnover, Profit Margin, Return on Assets, and Return on Equity.