This exercise is based on the Peabody Toys, Inc., data fromExercise 5-22. Required: 1. Determine the following
Question:
Required:
1. Determine the following components of the DuPont framework for 2011:
a. Profit margin on sales.
b. Asset turnover.
c. Equity multiplier.
d. Return on shareholders' equity.
2. Write an equation that relates these components in calculating ROE. Use the Peabody Toys data to show that the equation is correct.
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Requirement 1 a Profit margin on sales 180 5200 35 b Asset turnover ...View the full answer
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Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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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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