can you help me with a,b,c,d,and e? thanks
in recent years. Per The firm has e A firm has been cosition using tromment on its debt. The most has no Debt/Total capital DUPONT ANALYSIS A firm has been experiencing low profitability in form an analysis of the firm's financial position using the bul'ont equation lease payments but has a 32 million sinking fund payment on its debt industry average ratios and the firm's financial statements are as follows: Industry Average Ratios TOX 1284 1150% Foud assets turnover Current ratio Total assets turnover 20% Debt-to-capital ratio Profit margin Times interest earned Return on total assets EBITDA coverage Return on common equity Inventory turnover Return on invested capital 24 days Days sales outstanding "Calculation is based on a 365-day year.
Balance Sheet as of December 31, 2015 (Millions of Dollars) Cash and equivalents $78 Accounts payable $ 45 Accounts receivable 66 66 Other current abilities Inventories 159 Notes payable Total current assets $393 Total current liabilities $ 85 Long-term debt Total abilities $135 Gross fixed assets 225 Common stock 114 Less depreciation Retained earnings Net foed assets 201 $147 Total stockholders' equity Total assets $315 $450 Total abilities and equity $450 Income Statement for Year Ended December 31, 2015 (Millions of Dollars) Net sales Cost of goods sold Gross profit Selling expenses EBITDA Depreciation expense Camings before interest and takes EBM $795.0 660.0 $135.0 73.5 $ 61,5 $ 495 Camings before taxes (ET) 18.0 Het income Calculate the ratios you think would be useful in this analysis b. Construct a
D ont equation, and compare the company's aties to the induses $ 45.0 $ 270 average ratios Do the balance sheet accounts of the income state responsible for the low profits? Which specific accounts seem to be most out of fu seem to be p industry? em to be primarily If the firm had a pronounced seasonal sales pat if it are rapidly dur wear how might that meet the valadity of your ratio analys) How might you t he other firms in ve to other firms in the for such potential problems? rapidly during the sht you correct $30% Inventories Total current assets Long-terul Total liabilities Common stock Retained earnings $135 114 201 $315 225 78 Gross fixed assets Less depreciation Net fixed assets $147 Total stockholders' equity Total liabilities and equity $450 $450 Total assets 015 (Millions of Dollars) Income Statement for Year Ended December 31, 2015 (Millions Net sales Cost of goods sold Gross profit Selling expenses $795.0 660.0 $135.0 73,5 $ 61.5 12.0 $ 49.5 EBITDA Depreciation expense Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Taxes (40%) Net income $ 45.0 18.0 $ 27.0 a. Calculate the ratios you think would be useful in this analysis. b. Construct a DuPont equation, and compare the company's ratios to the industry average ratios. C Do the balance sheet accounts or the income statement figures seem to be primary responsible for the low profits? d. Which specific accounts seem to be most out of line relative to other firms industry? If the firm had a pronounced seasonal sales pattern or if it grew rapluny year, how might that affect the validity of your ratio analysis? How mu for such potential problems? ve to other firms in the Tif it grew rapidly during the ySis? How might you correct
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