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If I remember correctly, the Dupont equation breaks down our ROE into three component ratios: the (operating profit margin OR net profit margin), the total asset turnover ratio, and the (equity multiplier OR debt ratio).

And, according to my understand of the DuPont equation and its calculation of ROE, the three ratios provide insights into the company's (use of debt vs equity finacing OR shareholder and dividend management), effectiveness in using the company's assets, and (management of its revenues and depreciation methods OR control over its expenses)

Balance Sheet Data Cash Accounts receivable Inventory Current assets Income Statement Data $12,000,000 7,200,000 4,800,000 3,000,000 1,800,000 1,248,000 552,000 193,200 S358,800 $600,000 Accounts payable 1,200,000 Accruals 1,800,000 Notes payable 3,600,000 Current liabilities $720,000 Sales 240,000 Cost of goods sold 960,000 Gross profit 1,920,000 Operating expenses 2,400,000 EBIT 4,320,000 Interest expense Long-term debt Total liabilities Common stock 720,000 EBT 2,160,000 Taxes 2,880,000 Net income Net fixed assets 3,600,000 Reained earnings Total equity Total assets $7,200,000 Total debt and equity 7,200,000 YOU: 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 spreadsheet 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 calcul ated value if you r calculation is correct and leave it unchecked i if your calculation is incorrect. DuPont Analysis Ratios (Value Gross profit margin (40.00%) Operating profit margin (4.60%) Net profit margin (4.98%) Return on equity (13.89%) Total asset turnove (1.67x) Debt ratio (60.00%) Equity multiplier (1.67) Correct