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Calculate Return on equity (ROE), Return on assets (ROA), Net Profit Margin (NPM), Debt ratio, and Total assets turnover for 2018 and 2019. Explain why

Calculate Return on equity (ROE), Return on assets (ROA), Net Profit Margin (NPM), Debt ratio, and Total assets turnover for 2018 and 2019. Explain why ROE is lower in 2019 than in 2018 (explain in terms of each ratio in DuPont equation for ROE).

Income Statements ($ in millions)

Balance Sheets ($ in millions)

2018

2019

Assets

2018

2019

Sales Revenue

$2,580

$2,865

Cash

$70

$50

Less: Cost of goods sold

$1,060

$1,500

Short-Term investments

$35

$9

Less: Operating Expenses

$105

$162

Accounts rec.

400

460

Less: Depreciation

$85

$80

Inventory

490

556

Earnings before interest and taxes

$1,330

$1,123

Total Current Assets

$995

$1,075

Less: Interest paid

$350

$380

Net fixed assets

1890

1,910

Taxable Income

$980

$743

Less: Taxes (40%)

$392

$297

Total assets

$2,885

2,985

Net income

$588

$446

Liabilities and Owner's Equity

Dividends (45%)

$265

$201

2015

2016

Additions to Retained Earnings

$323

$245

Accounts payable

$240

$210

Accruals

$20

$20

Notes payable

65

74

Total Current Liabilities

$325

$304

Long-term debt

884

1090

Total Liabilities

$1,209

$1,394

Common stock

1341

1011

Retained earnings

335

$580

Total Equity

1676

$1,591

Total liab.& equity

$2,885

$2,985

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