Answer the following questions regarding Herman Miller.

	ROE	PM	TAT	EM
MLHR	22.8%	4.58%	1.80	2.77
Industry	25.9%	4.50%	2.30	2.50

1. What component(s) is(are) improving MLHR's ROE relative to the industry average? (Options to choose from: Profit Margin - Asset Efficiency - Financial Leverage - None)

2. Based on this DuPont analysis which of the following areas are strengths for MLHR? (could be more than one) (Options to choose from: Profit Margin - Asset Efficiency - Financial Leverage - None)

3. Based on this DuPont analysis which of the following areas are weaknesses for MLHR? (could be more than one) (Options to choose from: Profit Margin - Asset Efficiency - Financial Leverage - None)

RATIO ANALYSIS - Herman Miller RMA Industry Comparison 6/1/2013 5/31/2014 5/30/2015 LIQUIDITY Current Quick 1.4 1.3 1.3 0.9 2.1 1.1 1.0 0.9 15.4 16.0 10.4 6.2 ASSET MANAGEMENT Inventory Turnover (COGS / Inventory) Total Asset Turnover 1.9 1.9 1.8 2.3 37 40 32.3 51 24 23 DSO (AR Period) (365/AR Turnover) Inventory Period (365/Inventory Turnover) Days in AP (AP Period) (365/[COGS/AP]) Cash Cycle 35.0 67.3 44.5 59 110.0 37 41 40 20 23 22.8 73 LEVERAGE TIE (EBIT / Interest) Debt / Equity (RMA Debt/Worth) Cash Coverage Ratio 6.7 2.0 8.7 -1.5 1.7 0.7 9.3 1.8 11.9 5.6 1.5 PROFITABILITY % Profit BT / Tot Assets Gross Profit PM (NI/Sales) RMA uses NIBT/Sales 10.27% 34.10% 3.84% -4.38% 33.53% -1.17% 12.17% 36.94% 4.58% 13.40% 28.30% 4.50% DuPont Analysis: ROE = ROA*EM, ROA=PM*TAT ROE (NI / Total Equity) ROA (NI / Total Assets) PM (NI / Sales) Total Asset Turnover Equity Multiplier (A / E) 21.35% 7.21% 3.84% 1.88 2.96 -5.94% -2.23% -1.17% 1.90 2.66 22.75% 8.23% 4.58% 1.80 2.77 25.9% 10.4% 4.5% 2.30 2.50