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You have the following data about a company: : $ 4 5 0 , 0 0 0 Sales : 3 0 0 , 0 0

You have the following data about a company:
: $450,000
Sales
: 300,000
Total assets
22,500
Net income
: 100,000
Accounts payable and Accrued expenses
: not known
Interest-bearing debt
: not known
Stockholders' equity
Your analyst has presented you with the following ratios:
Return on Equity (ROE)
: 22.5%
Return on Assets (ROA)
: 7.5%
Profit margin
: 5%
Asset turnover
: not known
Equity multiplier
: not known
Required:
A.
(i) Identify the ROE drivers according to the DuPont equation
5 marks
(ii) Write the extended DuPont equation
5 marks
B. Calculate the following:
(i) Asset turnover
3 marks
(ii) Equity multiplier
3 marks
(iii) Debt-equity ratio
5 marks
(iv) Liabilities-to-equity ratio = Total liabilities - Stockholders' equity
5 marks
C. If all of the company's assets are operating assets, what are the company's net operating assets (NOA).

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