Walking down the hall of your office building with a sheaf of papers in her hand, your friend and colleague, Akiko, stepped into your office and asked the following AKIKO: Do you have 10 or 15 minutes that you can spare? YOU: Sure, I've got a meeting in an hour, but I don't want to start something new and then be interrupted by the meeting, so how can I help? AKIKO: I've been reviewing the company's financial statements and looking for general ways to improve our performance, in general, and the company's return on equity, or ROE, in particular. Zander, my new team leader, suggested that I start by using a DuPont analysis, and I'd like to run my numbers and conclusions by you, to see if I've missed anything. Here are the balance sheet and income statement data that Zander gave me, and here are my notes with my calculations Could you start by making sure that my numbers are correct? YOU: Give me a minute to look at these financial statements and to remember what I know about the DuPont analysis. Cash Income Statement Data Sales Balance Sheet Data $1,500,000 3,000,000 4,500,000 9,000,000 $1,800,000 600,000 Accounts receivable Inventory $30,000,000 18,000,000 12,000,000 7,500,000 Cost of goods sold Gross profit Operating expenses EBIT Current assets Accounts payable Accruals Notes payable Current liabilities Long-term debt Total liabilities Common stock Retained earnings Total equity Total debt and equity 4,500,000 792,000 2,400,000 4,800,000 4,200,000 9,000,000 1,500,000 4,500,000 6,000,000 $15,000,000 Interest expense EBT Net fixed assets 6,000,000 Taxes 3,708,000 1,297,800 $2,410,200 Net Income Total assets SI5,000,000 If I remember correctly, the DuPont equation breaks down our return on equity (ROE) into three component ration: 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 notes with your ratios, and then we can talk about possible strategies that will improve the ratios