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DuPONT ANALYSIS Henderson's Hardware has an ROA of 10%, a 6% profit margin, and an ROE...

DuPONT ANALYSIS Henderson's Hardware has an ROA of 10%, a 6% profit margin, and an ROE of 21%.

What is its total assets turnover? Round your answer to two decimal places.

What is its equity multiplier? Round your answer to two decimal places.

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Answer #1

ROA=net income/Total assets

net income=0.1*Total assets

ROE=net income/equity

net income=0.21 equity

Profit margin=net income/Sales

net income=0.06 Sales

Total asset turnover=Sales/Total assets

=(net income/0.06)/(net income/0.1)

=1.67(Approx).

Equity multiplier=Total Assets/equity

=(net income/0.1)/(net income/0.21)

=2.1

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