Use the dupont system to calculate the return on assets

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Reference no: EM13971805

Following are selected financial data in thousands of dollars for the Hunter Corporation.

2012 - 2011 :

Current Assets.......$500 $400
Fixed Assets, net...... $700, $600
Total Assets........ $1,200, $1,000
Current Liabilities....... $300, $200
Long-term debt........ $200, $200
Common equity........ $700, $600
Total Liabilities& Equity... $1,200 $1,000
Net Sales.......... $1,500 $1,200
Total Expenses........ -$1,390 -$1,100
Net income.......... $110, $100

a) Calculate Hunter's rate of return on total assets in 2012 and in 2011. Did the ratio improve or worsen?

b) Diagram the expanded DuPont system for Hunter for 2012. Insert the appropriate dollar amounts wherever possible.

c) Use the DuPont system to calculate the return on assets for the two years, and determine why they changed.

Reference no: EM13971805

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