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The following condensed information was reported by Peabody Toys, Inc., for 2016 and 2015: ($ in 000s) 2016 2015 Income statement information Net sales $
The following condensed information was reported by Peabody Toys, Inc., for 2016 and 2015: |
($ in 000s) | ||||||
2016 | 2015 | |||||
Income statement information | ||||||
Net sales | $ | 5,400 | $ | 4,400 | ||
Net income | 228 | 128 | ||||
Balance sheet information | ||||||
Current assets | $ | 820 | $ | 770 | ||
Property, plant, and equipment (net) | 1,280 | 930 | ||||
Total assets | $ | 2,100 | $ | 1,700 | ||
Current liabilities | $ | 560 | $ | 210 | ||
Long-term liabilities | 770 | 770 | ||||
Paid-in capital | 600 | 600 | ||||
Retained earnings | 170 | 120 | ||||
Liabilities and shareholders equity | $ | 2,100 | $ | 1,700 | ||
Required: 1. Determine the following components of the DuPont framework for 2016: Profit Margin (%) I Choose Denominator: Choose Numerator: Profit Margin Profit Margin 0 Asset Turnover 1 Choose Denominator: Choose Numerator: Return on Assets Return on assets Equity Multiplier I Choose Denominator: Choose Numerator: = Return on Assets Return on assets Choose Numerator: Return on Shareholders' Equity_(%) I Choose Denominator: Return on Shareholders' Equity Return on shareholders' equity 2. Write an equation that relates these components in calculating ROE. Use the Peabody Toys data to show that the equation is correct. (Round your answers to 2 decimal points.) Profit margin Profit margin H a ssel turnover A Asset turnover Equity multiplier = E quity multiplier : ROE 0.00% ROE 205
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