This question has two parts. Show all calculation.

The following information has been extracted from the books of Daisy Ltd, a dairy farm in Queensland.

• Total asset turnover: 1.8 times
• Leverage ratio: 2.4
• Debt to equity ratio; not available - calculate from leverage ratio
• Profit margin: 7.0%
• Interest burden: 0.9
• Tax burden: 0.7
• Tax rate: 30%
• Interest rate on debt: 7%.

Calculate for Daisy Ltd:

a. The return on equity (ROE) using the du Pont system. 5 marks

b. The operating return on asset (ROA). 10 marks