Balance Sheet Data Income Statement Data Cash $18,000,000 9,000,0OD 9,000,000 4,500,00OD 4,500,0OD 669,600 3,830,400 1,340,640 $2,489,760 900,000 Accounts payable 1,800,000 Accruals 2,700,000 Notes payable 5,400,000 $1,080,000 Sales Accounts receivable 360,000Cost of goods sold 1,440,000 Gross profit 2,880,000Operating expenses 4,140,0OD EBIT 7,020,000 Interest expense Current assets Current liabilities Long-term debt Total liabilities Common stock 945,000 EBT 2,835,00D Taxes 3,780,00D Net income Net fixed assets 5,400,000 Retained earnings Total equity Total assets $10,800,00 Total debt and equity $10,800,000 If I remember correctly, the DuPont equation breaks down our ROE into three component ratios: the the total asset turnover ratio, and the And, according to my understanding of the DuPont equation and its calculation of ROE, the three ratios provide insights into the company's effectiveness in using the company's assets, and 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 incomect. Canis Major Veterinary Supplies Inc. DuPont Analysis Check if Correct Check if Correct Ratios Profitability ratios Gross profit margin(%) Operating profit margin(%) Net profit margin (%) Return on equity (%) Value Ratios Value Asset management ratio 50.00 21.28 23.05 59.28 Total asset turnover 1.67 Financing ratios Equity multiplier 1.54 Landon OK, it looks like I've got a couple of incorrect values, so show me your calculations, and then we can talk strategies for You I've just made rough calculations, so let me complete this table by inputting the components of each ratio and its value Canis Major Veterinary Supplies Inc. DuPont Analysis Ratios Calculation Value Profitability ratios Numerator Denominator Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) Asset management ratio Total asset turnover Financing ratios Equity multiplier Landon T see what I did wrong in my computations. Thanks for reviewing these calculations with me. You saved me from a lot of embarrassment! Amelia would have been very disappointed In me If I had showed her my original work. So, now let's switch topics and identify general strategies that could be used to positively affect Canis Major's ROE You OK, so given your knowledge of the component ratios used in the DuPont equation, which of the following strategies should improve the company's ROE? (Check all that apply-) Increase the firm's bottom-line profitability for the same volume of sales, which will increase the company's net profit margin Use more equity financing in its capital structure, which will increase the equity multiplier Decrease the company's use of debt capital because it will decrease the equity multiplier Use more dett financing in its capital structure and increase the equity multiplier Landon I think I understand now. Thanks for taking the time to go over this with me, and let me know when I can return the favor