ratios are important because they indicate how well the assets of a firm are used to generate sales and/or cash. 1) debt 2) Cost of goods 3) profitability 4) turnover (efficiency) 5) leverage A firm has a given set of values for its basic Dupont components. If, other things unchanged, the interest rate charged for its debt declined (maybe it was using floating rate debt), then the most likely direct effect would be 1) lower leverage ratio 2) lower net profit margin 3) higher leverage ratio 4) higher net profit margin 5) higher asset turnover ratio