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Return on Investment, DuPont Analysis and Financial Leverage The following table presents selected 2016 financial information for Sunder Company. Sunder Company Selected 2016 Financial Data

Return on Investment, DuPont Analysis and Financial Leverage The following table presents selected 2016 financial information for Sunder Company.

Sunder Company Selected 2016 Financial Data
Balance Sheet:
Average total assets $1,000,000
Average total liabilities 500,000
Average stockholders' equity 500,000
Income Statement
Sales revenue $1,000,000
Earnings before interest (net of tax) 20,000
Interest expense (net of tax) 15,000
Net income 5,000

Round answers to one decimal place (i.e., 0.0025 = 0.3%). Use negative signs with answers, when appropriate.

a. Compute Sunder's ROE, ROA, and ROFL for 2016

ROE Answer
ROA Answer
ROFL Answer

b. Use the DuPont analysis described in the Business Insight on page 230 to disaggregate ROE.

Net profit margin Answer
Asset turnover Answer
Financial leverage Answer

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