The income statement and balance sheet for Rollins Company are provided below. Using the DuPont framework, compute
Question:
The income statement and balance sheet for Rollins Company are provided below. Using the DuPont framework, compute the profit margin, asset turnover, assets-to-equity ratio, and resulting return on equity for the year2012.
Rollins Company Income Statement For the Year Ended December 31, 2012 $200,000 Revenue from services Operating expenses: Insurance expense Rent expense. Office supplies expense. Salaries expense S 6,000 1,500 5,000 100,000 112,500 $ 87,500 Net income Rollins Company Balance Sheet December 31, 2012 Assets Liabilities and Owners' Equity S 30,000 60,000 15,000 230,000 Accounts payable.. Capital stock. Retained earnings. Cash. $ 80,000 75,000 180,000 Accounts receivable Notes receivable Machinery Total liabilities and owners' equity. Total assets $335,000 $335,000
Step by Step Answer:
Profitability Profit margin 87500 2000...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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