An analysis of company performance using Dupont analysis

Walking down the hall of your office building with a sheaf of papers in his hand, your friend and colleague, Landon, stepped into your office and asked the following.

9. An analysis of company performance using DuPont analysis Aa Aa Walking down the hall of your office building with a sheaf of papers in his hand, your friend and colleague, Landon, stepped into your office and asked the following Landon: Do you have 10 or 15 minutes that you can spare? You: Sure, I've got a meeting in an hour, but I don't want to start something new and then be interrupted by the meeting, so how can I help? Landon: I've been reviewing the company's financial statements and looking for general ways to improve our performance, in general, and the company's return on equity, or ROE, in particular. Amelia, my new team leader, suggested that I start by using a DuPont analysis, and I'd like to run my numbers and conclusions by you, to see if I've missed anything Here are the balance sheet and income statement data that Amelia gave me, and here are my notes with my calculations Could you start by making sure that my numbers are correct? You: Give me a minute to look at these financial statements and to remember what I know about the DuPont analysis. Balance Sheet Data $600,000 Accounts payable 1,200,000 Accruals 1,800,000 Notes payable 3,600,000 Income Statement Data $12,000,000 6,000,000 6,000,000 3,000,000 3,000,000 280,800 2,719,200 951,720 $1,767,480 Cash Accounts receivable Inventory $720,000 Sales 240,000 Cost of goods sold 960,000 Gross profit 1,920,000 Operating expenses 1,380,000 EBIT 3,300,000 Interest expense Current assets Current liabilities Long-term debt Total liabilities Common stock 675,000 EBT 2,025,000 Taxes 2,700,000 Net income Net fixed assets 2,400,000 Retained earnings Total equity Total assets $6,000,000 Total debt and equity $6,000,000