Note: When answering this question, please use the expanded Depont analysis, as follows: ROE = Net Profit Margin X Total Asset Turnover X Equity Multiplier Ratio

Following are financial statement for the Genatron Manufacturing Corporation for 1998 & 1999.

a. Apply DuPont analysis to both the 1998 and 1999 financial statements' data.

b. Explain how financial performance differed between 1998 and 1999.

Balance Sheet	1999	1998
ASSETS
Cash	$40,000	$50,000
Accounts receivable	260,000	200,000
Inventory	500,000	450,000
Total current assets	800,000	700,000
Fixed assets, net	400,000	300,000
Total assets	$1,200,000	$1,000,000
LIABILITIES AND EQUITY
Accounts payable	$170,000	$130,000
Bank loan, 10%	90,000	90,000
Accruals	70,000	50,000
Total current liabilities	330,000	270,000
Long-term debt, 12%	400,000	300,000
Common stock, $10 par	300,000	300,000
Capital surplus	50,000	50,000
Retained earnings	120,000	80,000
Total liabilities and equity	$1,200,000	$1,000,000
Income Statement	1999	1998
Net Sales	$1500,000	$1,300,000
Cost of goods sold	900,000	780,000
Gross profit	600,000	520,000
Expenses: general & adminstrative	150,000	130,000
Marketing	150,000	130,000
Depreciation	53,000	40,000
Interest	57,000	45,000
Earnings before taxes	190,000	155,000
Income taxes	76,000	62,000
Net Income	$114,000	$93,000

c. Calculate Genatron's dollar amount of net working capital in each year.

d. Calculate the current ratio and the quick, or cid-test, ratio in each year.

e. Calculate the average collection period and the inventory turnover ratio in each year.

f. What changes in the management of Genatron's current assess seem to have occured between the two years?

g. Calculate Genatron's Debt to Total Asset ratio

h. Calculate Genatron's Debt to Total Equity ratio

i. Calculate Genatron's Time-Interest Earned ratio