The DuPont equation shows the relationships among asset management, debt management, and -Select- ratias. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation is: ROE = Profit margin x Total assets turnover x Equity multiplier factors ako need to be considered. Ratio analysis is important to understand and interpret financial statements; however, sound finandal analysis involves more than just calculating and interpreting numbers. -Select- Quantitative Problem: Rosnan Industries 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: 2019 2018 Cash and equivalents $ 100 $ 95 Accounts receivable 275 300 Inventaries 375 250 Total current assets $ 750 $ 735 Net plant and equipment 2,000 1,490 Total assets $2,750 $2,225 Accounts payable $ 150 $ 85 Accruals 75 50 Notes payable 150 175 Total current liabilities $375 $ 310 Long-term debt 450 290 Common stack 1,225 1,225 Retained eamings 700 400 Total liabilities and equity $2,750 $2,225 Income Statements: 2019 2018 Sales $1,B65 $1,425 Operating costs excluding 1,250 1,000 depreciation EBITDA $ 635 S 425 Depreciation and amortization 100 7 5 525 S 350 Interest Text (25% Net income $ 225 Dividends pald Addition to retained earnings # 54 S 48 $ 300 5 180 Shares outstanding Price WACC 100 $25.00 10.00% 100 $22.50 What is the firm's 2019 current ratio? Round your answer to two decimal places. The 2019 current ratio indicates that Rosnan has (-Select- 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. 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 (-Select- A. What is the firm's 2019 debt-to-capital ratio? Round your answer to two decimal places. If the industry average debt-to-capital ratio is 30%, then Rosnan's creditors have a -Select- Acushion than indicated by the industry average. What is the firm's 2019 profit margin? Round your answer to two decimal places. 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. -Select- 4 What is the firm's 2019 price/earnings ratio? Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places. The DuPont equation shows the relationships among asset management, debt management, and -Select- ratias. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation is: ROE = Profit margin x Total assets turnover x Equity multiplier factors ako need to be considered. Ratio analysis is important to understand and interpret financial statements; however, sound finandal analysis involves more than just calculating and interpreting numbers. -Select- Quantitative Problem: Rosnan Industries 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: 2019 2018 Cash and equivalents $ 100 $ 95 Accounts receivable 275 300 Inventaries 375 250 Total current assets $ 750 $ 735 Net plant and equipment 2,000 1,490 Total assets $2,750 $2,225 Accounts payable $ 150 $ 85 Accruals 75 50 Notes payable 150 175 Total current liabilities $375 $ 310 Long-term debt 450 290 Common stack 1,225 1,225 Retained eamings 700 400 Total liabilities and equity $2,750 $2,225 Income Statements: 2019 2018 Sales $1,B65 $1,425 Operating costs excluding 1,250 1,000 depreciation EBITDA $ 635 S 425 Depreciation and amortization 100 7 5 525 S 350 Interest Text (25% Net income $ 225 Dividends pald Addition to retained earnings # 54 S 48 $ 300 5 180 Shares outstanding Price WACC 100 $25.00 10.00% 100 $22.50 What is the firm's 2019 current ratio? Round your answer to two decimal places. The 2019 current ratio indicates that Rosnan has (-Select- 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. 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 (-Select- A. What is the firm's 2019 debt-to-capital ratio? Round your answer to two decimal places. If the industry average debt-to-capital ratio is 30%, then Rosnan's creditors have a -Select- Acushion than indicated by the industry average. What is the firm's 2019 profit margin? Round your answer to two decimal places. 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. -Select- 4 What is the firm's 2019 price/earnings ratio? Round your answer to two decimal places. Using the DuPont equation, what is the firm's 2019 ROE? Round your answer to two decimal places
