Dana Dairy Products Key Ratios

		Industry Average		Actual 2009
Current Ratio		1.3		1
Quick Ratio		0.8		0.75
Average Collection Period		23 days		30 days
Inventory Turnover		21.7		19
Debt Ratio		64.70%		50.00%
Times Interest Earned		4.8		5.5
Gross Profit Margin		13.60%		12.00%
Net Profit Margin		1.00%		0.50%
Return on total assets		2.90%		2.00%
Return on Equity		8.20%		4.00%

Income Statement Dana Dairy Products For the Year Ended December 31, 2010

Sales Revenue			$100,000
Less: Cost of Goods Sold			87,000
Gross Profit			$13,000
Less: Operating Expenses			11,000
Operating Profit			$2,000
Less: Interest Expenses			500
Net Profits before Taxes			$1,500
Less: Tax (40%)			600
Net Profits after Taxes			$900

Balance Sheet Dana Dairy Product December 31, 2010

	Assets
Cash					$1,000
Accounts Receivable					8,900
Inventories					4,350
	Total Current Assets				$14,250
Gross Fixed Assets				35,000
Less: Accumulated Depreciation				13,250
Net Fixed Assets					21,750
	Total Assets				$36,000
	Liabilities & Stockholders' Equity
Accounts Payable					$9,000
Accruals					6,675
	Total Current Liabilities				$15,675
Long-term Debt					4,125
	Total Liabilities				$19,800
Common Stock					1,000
Retained Earnings					15,200
	Total Stockholders' Equity				$16,200
	Total Liabilities & Stockholders Equity				$36,000

What was the working capital requirement (or NCAI) for Dana Dairy Products in 2010?

What was the inventory turnover for Dana Dairy Products in 2010?

Modified DuPont formula allows the analyst to break Dan Dairy Products return on equity into 3 components: the net profit margin, the total asset turnover, and a measure of leverage (the financial leverage multiplier=TA/Equity). Which of the following mathematical expressions represent the modified DuPont formula, ie ROE=ROAxFLM relative to Dana Dairy Products' 2010 performance?

In how many days was the average collection period for Dana Dairy Products in 2010?

What was the debt ratio?

Show your work.