DuPONT ANALYSIS

A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial position using the DuPont equation. The firm has no lease payments but has a $3 million sinking fund payment on its debt. The most recent industry average ratios and the firm's financial statements are as follows:

Industry Average Ratios
Current ratio	3.38x		Fixed assets turnover	7.57x
Debt-to-capital ratio	16.85%		Total assets turnover	3.80x
Times interest earned	12.16x		Profit margin	8.81%
EBITDA coverage	13.22x		Return on total assets	32.39%
Inventory turnover	11.72x		Return on common equity	46.84%
Days sales outstandinga	19.5 days		Return on invested capital	39.14%

aCalculation is based on a 365-day year.

Balance Sheet as of December 31, 2016 (Millions of Dollars)
Cash and equivalents	$58		Accounts payable	$26
Accounts receivables	41		Other current liabilities	20
Inventories	99		Notes payable	29
Total current assets	$198		Total current liabilities	$75
			Long-term debt	12
			Total liabilities	$87
Gross fixed assets	136		Common stock	75
Less depreciation	44		Retained earnings	128
Net fixed assets	$92		Total stockholders' equity	$203
Total assets	$290		Total liabilities and equity	$290

Income Statement for Year Ended December 31, 2016 (Millions of Dollars)
Net sales	$580.0
Cost of goods sold	411.8
Gross profit	$168.2
Selling expenses	52.2
EBITDA	$116.0
Depreciation expense	13.3
Earnings before interest and taxes (EBIT)	$102.7
Interest expense	4.9
Earnings before taxes (EBT)	$97.8
Taxes (40%)	39.1
Net income	$58.7

Calculate the following ratios. Do not round intermediate steps. Round your answers to two decimal places.

	Firm	Industry Average
Current ratio	x	3.38x
Debt to total capital	%	16.85%
Times interest earned	x	12.16x
EBITDA coverage	x	13.22x
Inventory turnover	x	11.72x
Days sales outstanding	days	19.5days
Fixed assets turnover	x	7.57x
Total assets turnover	x	3.80x
Profit margin	%	8.81%
Return on total assets	%	32.39%
Return on common equity	%	46.84%
Return on invested capital	%	39.14%

Construct a DuPont equation for the firm and the industry. Do not round intermediate steps. Round your answers to two decimal places.

	Firm	Industry
Profit margin	%	8.81%
Total assets turnover	x	3.80x
Equity multiplier	x	x