Analysis of Financial Statements: Tying the Ratios Together The DuPont equation shows the relationships among asset management, debt management, and ratios. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation ROE= Profit margin Total assets turnover Equity multiplier Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. factors also need to be considered. Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below. Income Statements: What is the firm's 2018 current ratio? Do not round intermediate calculations. Round your answer to two decimal places. If the industry average debt-to-assets ratio is 30%, then Rosnan's creditors have a cushion than indicated by the industry average. What is the firm's 2018 net profit margin? Do not round intermediate calculations. Round your answer to four decimal places. % If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-assets ratio might be one reason for its high profit margin. What is the firm's 2018 price/earnings ratio? Do not round intermediate calculations. Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2018 ROE? Do not round intermediate calculations. Round your answer to two decimal places. %