Susan is a farmer and her husband, Edward, works at the local bank. The farm is aligned as a sole proprietorship (family living is not included as a fixed farm expense). Here are the financial numbers:

Total Sales (Farm) $350,000

Other Income (Non-Farm) $50,000

Variable Expense (Farm) $200,000

Fixed Expense (Farm) $55,000

Interest Expense (Farm) $35,000

Total Farm Assets $750,000

Total Farm Liabilities $250,000

Family Living $35,000

 Required

a) Use these numbers to conduct a DuPont Financial Analysis for Susan’s farm only. By hand, calculate earns, turns, ROA, COD, Spread, Leverage, and ROE.

b) Susan doesn’t understand the term “Spread”. Explain it and why her “Spread” variable is concerning