This exercise is based on the Peabody Toys, Inc., data from E 4–27.

Data from in E 4-27

The following condensed information was reported by Peabody Toys, Inc., for 2024 and 2023:

 Required:
1. Determine the following components of the DuPont framework for 2024:
a. Profit margin on sales

b. Asset turnover
c. Equity multiplier
d. Return on equity
2. Write an equation that relates these components in calculating ROE. Use the Peabody Toys data to show that the equation is correct.

Transcribed Image Text:

Income statement information Net sales Net income Balance sheet information Current assets Property, plant, and equipment (net) Total assets Current liabilities Long-term liabilities Common stock Retained earnings Liabilities and shareholders' equity ($ in thousands) 2024 $5,200 180 $ 800 1,100 $1,900 $ 600 750 400 150 $1,900 2023 $4,200 124 $ 750 950 $1,700 $ 450 750 400 100 $1,700