Balance Sheet Data Cash $700,000 Accounts payable Accounts receivable 1,400,000 2,100,000 4,200,000 Accruals Notes payable Inventory Current assets Current liabilities Income Statement Data Sales $14,000,000 Cost of goods sold 7,000,000 Gross profit 7,000,000 Operating expenses 3,500,000 EBIT 3,500,000 Interest expense 571,200 EBT 2,928,800 Taxes 732,200 Net income $2,196,600 $840,000 280,000 1,120,000 2,240,000 3,640,000 5,880,000 980,000 2,940,000 3,920,000 $9,800,000 Long-term debt Total liabilities Common stock Net fixed assets 5,600,000 Retained earnings Total equity Total debt and equity Total assets $9,800,000 net profit margin , the total asset If I remember correctly, the DuPont equation breaks down our ROE into three component ratios: the turnover ratio, and the equity multiplier . And, according to my understanding of the DuPont equation and its calculation of ROE, the three ratios provide insights into the company's use of debt versus equity financing , effectiveness in using the company's assets, and control over its expenses Now, let's see your notes with your ratios, and then we can talk about possible strategies that will improve the ratios. I'm going to check the box to the side of your calculated value if your calculation is correct and leave it unchecked if your calculation is incorrect. Hydra Cosmetics Inc. DuPont Analysis Ratios Value Correct/Incorrect Ratios Value Correct/Incorrect Asset management ratio Total assets turnover 1.43 Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) 50.00 20.92 22.41 53.52 Financial ratios Equity multiplier 1.67