Susan is a farmer and her husband, Edward, works at the local bank. The farm is aligned
Question:
Susan is a farmer and her husband, Edward, works at the local bank. The farm is aligned as a sole proprietorship (family living is not included as a fixed farm expense). Here are the financial numbers:
Total Sales (Farm) $350,000
Other Income (Non-Farm) $50,000
Variable Expense (Farm) $200,000
Fixed Expense (Farm) $55,000
Interest Expense (Farm) $35,000
Total Farm Assets $750,000
Total Farm Liabilities $250,000
Family Living $35,000
Required
a) Use these numbers to conduct a DuPont Financial Analysis for Susan’s farm only. By hand, calculate earns, turns, ROA, COD, Spread, Leverage, and ROE.
b) Susan doesn’t understand the term “Spread”. Explain it and why her “Spread” variable is concerning
Expert Answer:
a Earnings Net IncomeTotal Assets 350000500002000005500035000750000 010 Turns SalesTotal Asse... View the full answer
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
