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Now, let's see your notes with your ratios, and then we can talk about possible strategies that will improve the ratios. In the dropdown lists
Now, let's see your notes with your ratios, and then we can talk about possible strategies that will improve the ratios. In the dropdown lists next to your values I'm going to select correct if your calculation is correct and incorrect if your calculation is incorrect. Value Correct/Incorrect Pavo Media Systems Inc. DuPont Analysis Value Correct/Incorrect Ratios Asset management ratio 40.00 Total asset turnover 1.43 Ratios Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) 10.50 9.75 Financial ratios Equity multiplier 21.45 1.54 ASHLEY: OK, it looks like I've got a couple of incorrect values, so show me your calculations, and then we can talk strategies for improvement. YOU: I've just made rough calculations, so let me complete this table by inputting the components of each ratio and its value: Note: Do not round intermediate calculations. Round final answers to the nearest whole number. Value Pavo Media Systems Inc. DuPont Analysis Calculation Numerator Denominator 1 = / 1 Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) Asset management ratio Total asset turnover Financing ratios Equity multiplier / TO / 1 Check all that apply. Increase the efficiency of its assets so that it generates more sales with each dollar of asset investment and increases the company's total asset turnover. Increase the interest rate on its notes payable or long-term debt obligations because it will reduce the company's net profit margin. Use more equity financing in its capital structure, which will increase the equity multiplier. Increase the firm's bottom-line profitability for the same volume of sales, which will increase the company's net profit margin
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