Answer:
The company's Return on Equity is 18.49% therefore is above the industry average of 15.79%
Explanation:
DU PONT ANALYSIS
ROE = PROFIT MARGIN X ASSET TURNOVER X EQUITY MULTIPLIER
Industry average ROE
0.0683 x 1.25 x 1.85 = 0,15794375 = 15.79%
<em><u>Company Dupont:</u></em>
<u>Profit margin:</u>
income 272,289
sales 4,765,889
profit margin: 0,05713288
<em><u>Assets Turnover: </u></em>
Sales 4,765,889
Total assets:
Cash 254,478
A/R 487,009
PEE <u> 2,478,554 </u>
total 3,220,041
Turnover: 1.48
<em><u>Equity Multiplier:</u></em>
Assets 3,220,041
Liabilities:
A/P 332,887
Accrued 139,877
long-term <u>1,275,000</u>
total 1,747,764
Equity: 3,220,041 - 1,747,764 = 1,472,277
Equity multiplier: 3,220,041 / 1,472,277 = 2.187116
Company's Dupont Calculation:
ROE = PROFIT MARGIN X ASSET TURNOVER X EQUITY MULTIPLIER
0,05713288 x 1.48 x 2.187116 = 0,184935229 = 18.49%