Question: Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5

 Using the Du Pont method, evaluate the effects of the followingrelationships for the Butters Corporation. a. Butters Corporation has a profit margin

Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5 percent and its return on assets (investment) is 22.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) Assets turnover ratio times b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) Return on equity % c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.) Return on equity % Jerry Rice and Grain Stores has $4,920,000 in yearly sales. The firm earns 4.5 percent on each dollar of sales and turns over its assets 2.5 times per year. It has $127,000 in current liabilities and $327,000 in long-term liabilities. a. What is its return on stockholders' equity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Return on stockholders' equity % b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 3.00, what will be the new return on stockholders' equity? Assume that the profit margin stays the same as do current and long-term liabilities. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) New return on stockholders' equity % Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5 percent and its return on assets (investment) is 22.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) Assets turnover ratio times b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) Return on equity % c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.) Return on equity % Jerry Rice and Grain Stores has $4,920,000 in yearly sales. The firm earns 4.5 percent on each dollar of sales and turns over its assets 2.5 times per year. It has $127,000 in current liabilities and $327,000 in long-term liabilities. a. What is its return on stockholders' equity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Return on stockholders' equity % b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 3.00, what will be the new return on stockholders' equity? Assume that the profit margin stays the same as do current and long-term liabilities. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) New return on stockholders' equity %

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