Return on assets

P/E ratio

Financial leverage

ROE

Use the DuPont equation and solve for ROE.

Assets
Cash	$ 85,632
Accounts receivable	878,000
Inventories	1,716,480
Total current assets	$ 2,680,112
Gross fixed assets	1,197,160
Less accumulated depreciation	380,120
Net fixed assets	$ 817,040
Total assets	$ 3,497,152
Liabilities and Equity
Accounts payable	$ 436,800
Accruals	408,000
Notes payable	300,000
Total current liabilities	$ 1,144,800
Long-term debt	400,000
Common stock	1,721,176
Retained earnings	231,176
Total equity	$ 1,952,352
Total liabilities and equity	$ 3,497,152

Sales	$ 8,035,600
Cost of goods sold	6,875,992
Other expenses	550,000
Total operating costs excluding deprec. & amort.	$ 7,425,992
EBITDA	$ 609,608
Deprec. & amort.	115,960
Operating income (EBIT)	$ 493,648
Interest expense	71,008
Earnings before taxes	$ 422,640
Taxes (40%)	169,056
Net income	$ 253,584
EPS	$ 1.014
DPS	$ 0.220
Book value per share	$ 7.809
Stock price	$ 12.17
Shares outstanding	250,000
Tax rate	40.00%
Lease payments	30,000