The DuPont equation shows the relationships among asset management, debt management, and profitability of improving the firm's performance. Its equation is: ratios. Management can use the DuPont equation to analyze ways = ROE Profit margin Total assets turnover Equity multiplier Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. factors also need to be considered. Qualitative Hide Feedback Correct Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: 2019 2018 Cash and equivalents Accounts receivable Inventories $ 60 $ 45 275 300 375 350 Total current assets $ 710 $ 695 Net plant and equipment 2,000 1,490 Total assets $2,710 $2,185 Accounts payable $ 150 $ 85 Accruals 75 50 Notes payable 110 135 Total current liabilities $ 335 $ 270 Long-term debt 450 290 Common stock 1,225 1,225 Retained earnings 700 400 Total liabilities and equity $2,710 $2,185 Income Statements: 2019 2018 Sales $1,885 $1,425 EBITDA Operating costs excluding depreciation Depreciation and amortization 1,250 1,000 $ 635 $ 425 100 75 EBIT Interest EBT Taxes (25%) Net income $ 535 $ 350 63 46 $ 472 $ 304 118 76 $ 354 228 Dividends paid $ 54 $ 48 Addition to retained earnings $ 300 $ 180 Shares outstanding Price WACC 100 100 $25.00 $22.50 10.00 % What is the firm's 2019 current ratio? Round your answer to two decimal places. 2.12 Hide Feedback Correct Check My Work Feedback Review the current ratio definition and equation. Realize that information will come from firm's balance sheet. Make sure that you use 2019 data and not 2018 data. The 2019 current ratio indicates that Rosnan has sufficient current assets to meet its current obligations as they come due. What is the firm's 2019 total assets turnover ratio? Round your answer to four decimal places. 0.6956 Given the 2019 current and total assets turnover ratios calculated above, if Rosnan's 2019 quick ratio is 1.0 then an analyst might conclude that Rosnan's fixed assets are managed inefficiently What is the firm's 2019 debt-to-capital ratio? Round your answer to two decimal places. 16.60 % Hide Feedback Partially Correct Check My Work Feedback If the industry average debt-to-capital ratio is 30%, then Rosnan's creditors have a What is the firm's 2019 profit margin? Round your answer to two decimal places. bigger cushion than indicated by the industry average. 18.78 % If the industry average profit margin is 12%, then Rosnan's lower than average debt-to-capital ratio might be one reason for its high profit margin. True What is the firm's 2019 price/earnings ratio? Round your answer to two decimal places. 7.06 Hide Feedback Correct Check My Work Feedback Review the price/earnings ratio definition and equation. Realize that information will come from the firm's income statement. Make sure that you use 2019 data and not 2018 data. Make sure that you calculate earnings per share correctly. Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places. .29 %