Question
The following condensed information was reported by Peabody Toys, Inc., for 2021 and 2020: ($ in thousands) 2021 2020 Income statement information Net sales $
The following condensed information was reported by Peabody Toys, Inc., for 2021 and 2020: ($ in thousands) 2021 2020 Income statement information Net sales $ 7,100 $ 6,100 Net income 468 162 Balance sheet information Current assets $ 990 $ 940 Property, plant, and equipment (net) 2,810 2,460 Total assets $ 3,800 $ 3,400 Current liabilities $ 2,160 $ 1,870 Long-term liabilities 940 940 Common stock 300 300 Retained earnings 400 290 Liabilities and shareholders equity $ 3,800 $ 3,400
Required: Determine the following components of the DuPont framework for 2021:
1. Write an equation that relates these components in calculating ROE.
2. Use the Peabody Toys data to show that the equation is correct.
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