Value Correct/Incorrect In the following table, select whether each of the ratios is correct or incorrect. Pavo Media Systems Inc. DuPont Analysis Ratios Value Correct/Incorrect Ratios Profitability ratios Asset management ratio Gross profit margin (%) Total assets turnover Operating profit margin (%) Net profit margin (%) Financial ratios Return on equity (%) Equity multiplier 40.00 2.00 12.36 16.07 53.67 1.67 AKIKO: 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, se let me complete this table by inputting the components of each ratio and its value: Note: Do not round intermediate calculations for this part Numerator Calculation Denominator Value Pavo Media Systems Inc.DuPont Analysis Ratios Profitability Ratios Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on equity (%) Numerator Asset management ratio Total assets turnover Calculation Denominator Value Numerator Calculation Denominator Value Financial ratios Equity multiplier AKIKO: I see what I did wrong in my computations. Thanks for reviewing these calculations with me. You saved me from a lot of embarrassmenti Zander would have been very disappointed in me if I had him showed my original work. So, now let's switch topics and identity general strategies that could be used to positively affect Pavo's ROE. YOU: OK, so given your knowledge of the component ratios used in the DuPont equation, which of the following strategies should Improve the company's ROE? Check all that apply. Use more equity financing in its capital structure, which will increase the equity multiplier. Increase the cost and amount of assets necessary to generate each dollar of sales because it will increase the company's total assets turnover Decrease the amount of debt financing used by the company, which will decrease the total assets turnover ratio. Increase the efficiency of its assets so that it generates more sales with each dollar of asset investment and increases the company's total assets turnover AKIKO: I think I understand now. Thanks for taking the time to go over this with me, and let me know when I can return the favor. Cash $30,000,000 Accounts receivable Inventory Balance Sheet Data $1,500,000 3,000,000 4,500,000 9,000,000 Accounts payable Accruals Notes payable $1,800,000 600,000 2,400,000 4,800,000 4,200,000 Income Statement Data Sales Cost of goods sold Gross profit Operating expenses EBIT Current assets 18,000,000 12,000,000 7,500,000 4,500,000 Current liabilities Long-term debt Total liabilities Common stock Interest expense EBT Taxes 792,000 3,708,000 1.297,800 Net fixed assets 9,000,000 1,500,000 4,500,000 6,000,000 $15,000,000 6,000,000 Retained earnings Total equity Net Income $2,410,200 Total assets $15,000,000 Total debt and equity