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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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