Cash Accounts receivable Inventory Current assets Balance Sheet Data $1,300,000 Accounts payable 2,600,000 Accruals 3,900,000 Notes payable 7,800,000 Current liabilities Long-term debt Total liabilities $1,560,000 520,000 2,080,000 4,160,000 4,290,000 8,450,000 1,137,500 3,412,500 4,550,000 $13,000,000 Income Statement Data Sales $26,000,000 Cost of goods sold 13,000,000 Gross profit 13,000,000 Operating expenses 6,500,000 EBIT 6,500,000 Interest expense 764,400 5,735,600 Taxes 2,007,460 Net income $3,728,140 Common stock EBT Net fixed assets 5,200,000 Retained earnings Total equity Total debt and equity Total assets $13,000,000 Check if Correct Ratios Value Canis Major Veterinary Supplies Inc. DuPont Analysis Check if Value Correct Ratios Asset management ratio 50.00 Total asset turnover 22.06 28.68 Financing ratios 88.330 Equity multiplier Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) 2. 000 1.54 D Akiko: OK, it looks like I've got a couple of incorrect values, so show me your calculations, and then we can talk strategies for improvement. You: I've just made rough calculations, so let me complete this table by inputting the components of each ratio and its value: Value Canis Major Veterinary Supplies Inc. DuPont Analysis Ratios Calculation 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 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.) Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin. Use more equity financing in its capital structure, which will increase the equity multiplier. Increase the cost and amount of assets necessary to generate each dollar of sales because it will increase the company's total asset turnover. Decrease the company's use of debt capital because it will decrease the equity multiplier