DuPont Analysis

a) Bate Industries has a quick ratio of 1.3, net profit margin of 6%, inventory turnover of 2.8, total asset turnover of 1.5, accounts receivable turnover of 2.2, a debt-to-equity ratio of 1.1, and its PE ratio is 18. (1) Find the firms equity multiplier (2) Compute ROE

b) Bate Industries has net income of $192 million on sales of $960 million. Bate has $320 million in Debt with $1.6 Billion in Assets. The firm has a beta of 1.1 and its required return is 12.9%. The market recently returned 14% and T-bills are earning 2% (1) Find the firms equity multiplier (2) Compute ROE