The first sentence options are - 1. net profit margin/gross profit margin, 2. total asset turnover/fixed asset turnover, 3. equity multiplier/debt ratio

the second sentence options are - 4. use of debt versus equity financing/shareholder and dividend management, 5. control over its expenses/management of its liquidity and its tax records.

Please answer questions fully and not partially.

9. An analysis of company performance using DuPont analysis Walking downthe hall of your office building with a sheaf of papers in his hand, your friend and colleague, Jason, stepped into your office and asked the following. Jason: Do you have 10 or 15 minutes that you can spare? You: Sure, I've gat a meeting in an hour, but I dont want to start something new and then be interrupted by the meeting, so how can I help? Jason: I've been reviewing the company's financial statements and looking for general ways to improve our performance, i general, and the company's retum on equity, or ROE, in particular. Anja, my new team leader, suggested that I start by using a DuPont analysis, and I'd like to run my numbers and condusions by you, to see if I've missedanything. Here are the balance sheetand income statement data that Anja gave me, and here are my nates with my calculations. Could you start by making sure that my numbers are correcti? You: Give me a minute to laok at these financial statements and toremember what I know about the DuPont analysis. Balance Sheet Data 900,000 Accounts payable 1,800,0D0 Accruals 2,70D, DDD Nates payable 5,400,0DD Income Statement Data Cash Accounts receivable Inventory $1,080,00D Sales 360,000Cost of goads sold 1,440,0DD Gross profit 2,880,DDD Operating expenses 3,060,00D EBIT 5,940,0D0 Interest expense 1,215,000 EBT 3,645,000 Taxes 4,860,DDD Net income $18,000,O00 9,000,0DD 9,000,0DD 4,50D,0DD 4,50D,0DD 540,0DD 3,960,00D 1,386,00D $2,574,00D Current assets Current liabilities Long-term debt Total liabilities Common stock Net fixed assets 5,400,DDD Retained eamings Total equity Total debt and equity Total assets $10,800,0DD $10,8DD,ODD If I remember correcdy, the DuPont equation breaks down our retum on equity (ROE) into three component ratios: the the ratio, and the And, according to my understanding of the DuPont equation and its calculation of ROE, the three ratios provide insights into the company's effectiveness in using the company's assets, and Now, let's see your nates with your ratios, and then we can talk about possible strategies that will improve the ratios. I'm going to check the box to the side of your calculated value if your calculation is correct and leave it unchecked if your calculation is incorrect. Cepeus Manufacturing Inc. DuPont Analysis Check if Correct Check if Correct Ratios Profitability ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Retum on equity (%) Value Ratios Value Asset management ratio Total asset turnover 50.00 22.0D 23.83 72.43 1.67 Financing ratios Equity multiplier 1.82 Jason: OK, it looks like I've got a couple of incorrect values, so show me your calculations, and then we can talk strategies for improvement. You: I've just made rough calculations, so let me complete this table by inputting the components of each ratio and its value Cepeus Manufacturing Inc. DuPont Analysis Ratios Profitability ratios Calculation Value Numerator Denominator Gross profit margin (%) operating profit margin (%) Net profit margin (%) Retum on equity (%) Asset management ratio Total asset turnover Financing ratios Equity multiplier Jason: I see what I did wrong in my computations. Thanks for reviewing these calculations with me. Yoau saved me from a lot of embarrassment! Anja would have been very disappointed in me if I had hershowed my original work. So, now let's switch topics and identify general strategies that could be used to pasitively affect Cepeus's ROE OK, so given your knowledge of the component ratios used in the DuPont equation, which of the following strategies You: should improve the company's ROE? (Check all that apply.) Increase the cost and amount of assets necessary to generate each dollar of sales because it will increase the company's total asset turnover Reduce the company's operating expenses, its cost of goads sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin. Use more debt financing in its capital structure and increase the equity multiplier Decrease the company's use of debt capital because it will decrease the equity multiplier