Analysis of Financial Statements: Tying the Ratios Together The DuPont equation shows the relationships among asset management, debt management, and -Select improving the firm's performance. Its equation is ratios. Management can use the DuPont equation to analyze ways ef ROE = Profit margin Total assets turnover Equity multiplier Ratio analysis is important to understand and interpret finandial statements; however, sound financial analysls Involves more than just calculating and interpreting ambers.elect factors also need to be considered. Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below. talance Sheets: 2018 2017 Cash and equivalents Accounts recelvable $105 300 350 $755 1,490 $2,770$2,24S $120 275 375 $770 2,000 Total current assets Net plant and equipment Total assets Accounts payable Accruals Notes payable $150 75 170 $395 450 $85 195 330 290 1,225 1,225 400 2,770$2.24S Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity 700 Income Statements: 2018 2017 Sales Operating costs excluding depreciation EBITDA Deprecation and amortization EBIT Interest EBT Taxes (40%) Net income $2,000 $1,500 1,000 $500 75 425 45 $380 152 $228 1.250 $750 100 $650 62 $588 235 $353 Dividends paid Addition to retained earnings $53 $300 $48 $180 Shares outstanding Price WACC 100 100 25.00 $22.50 10.00% What is the firm's 2018 current ratio7 Round your answer to two decimal places. If the industry average debt to total assets ratio ls 30%, then Rosnan's creditors have cushion that t dated by the usv mage