Find the net profit margin for the firm for 2017? Find the asset turnover for th

Question

Find the net profit margin for the firm for 2017?

Find the asset turnover for the firm in 2017?

What is the equity multiplier for the firm in 2017?

What is the DuPont ratio for the firm in 2017?

Sales Cost of Goods Sold Gross Margin Depreciation Administrative Costs EBIT Interest Pre-tax income Taxes Net Income Dividends Addition to Retained Earnings 2017 $107,450.00 $64,470.00 $42,980.00 $19,200.00 $10,800.00 $12,980.00 $4,000.00 $8,980.00 $3,592.00 $5,388.00 $0.00 $5,388.00 BALANCE SHEET AS OF 12/31/2017: 2017 $6,000.00 $18,239.00 ,117.50 $40,356.50 $92,000.00 $132,356.50 ASSETS Cash Inventory Accounts Receivable Current Assets Net PPE Total Assets (TA) $16 LIABILITIES& SHAREHOLDER EQUITY Accounts Payable Current Liabilities Long Tem Debt Total Liabilities Shareholder Equity Total Liabilities and Shareholder Equity 2017 $30,000.00 $30,000.00 $46,968.50 $76,968.50 $55,388.00 $132,356.50

Explanation / Answer

(1) - Net Profit Margin for the firm for 2017

Net Profit Margin = [Net income / Sales ] x 100

= [$5,388.00 / 107,450.00] x 100

= 5.01%

(2) - Asset turnover for the firm in 2017

Total asset turnover = Sales / Total Assets

= $107,450.00 / 132,356.50

= 0.81

(3) - Equity multiplier for the firm in 2017

Equity multiplier = 1 + Debt-equity ratio

Debt-equity ratio = Total debt / Total equity

= $76,968.50 / 55,388.00

= 1.39

Therefore, Equity Multiplier = 1 + 1.39 = 2.39 Times

(4) - DuPont ratio for the firm in 2017

Firm’s DuPont Ratio = Net Profit Margin x Total Asset Turnover x Equity Multiplier

= 5.01% x 0.81 x 2.39

= 9.73%

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