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The DuPont formula relates return on equity (= Net incomet + Stockholders equity) to the company's net profit margin (Net income + Sales), asset turnover
The DuPont formula relates return on equity (= Net incomet + Stockholders equity) to the company's net profit margin (Net income + Sales), asset turnover (= Sales + Total assets;), and equity multiplier (Total assets + Stockholders equity). This Company is in an industry where the average net profit margin is 10.65%, the debt-to-asset ratio (Debt + Total assets) is 51.30%, and return on equity is 47.06%. Find below the Company's financial statements for year 2525. CA PP&E TA $6,644 Debt $7,851SE $14,495 $5,847 $8,648 $14,495 Sales total costs NI $31,111 $27,867 $3,244 the company's asset turnover indicates sales are unusually large relative to its assets the company's profit margin indicates its revenues are unusually small relative to its costs the company's equity multiplier indicates the firm has an unusually small debt burden the company's asset turnover indicates sales are unusually small relative to its assets the company's equity multiplier indicates the firm has an unusually large debt burden
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