. Gulf Controls, Inc., has a net profit margin of 10 percent and earnings after taxes of 600,000. Its current balance sheet follows: Current assets $1,800,000 Current liabilities $ 600,000 Fixed assets 2,200,000 Long-term debt 1,000,000 Total assets $4,000,000 Common stock 500,000 Retained earnings 1,900,000 Total liabilities and stockholders equity $4,000,000 REQUIRED:

a. Calculate Gulfs return on stockholders equity. Round your answer to the nearest whole number. %

b. The industry average ratios are as follows: Net profit margin 6%. Total asset turnover 2.5 times .Equity multiplier 1.4 times

i) Compare Gulf Controls with the average firm in the industry.

Round your answer for net profit margin to the nearest whole number and round your answers for both total asset turnover and equity multiplier to two decimal places.

ii) What is the source of the major differences between the Gulf and the industry average ratios

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