Some recent financial statements for Smolira Golf Corp. follow.

Some recent financial statements for Smolira Golf Corp. follow.  

SMOLIRA GOLF 2011 and 2012 Balance Sheets
Assets									Liabilities and Owners’ Equity
	2011				2012					2011				2012
Current assets									Current liabilities
Cash	$	24,086			$	24,500			Accounts payable	$	23,584			$	27,500
Accounts receivable		12,848				15,600			Notes payable		15,000				11,200
Inventory		26,042				27,500			Other		11,971				18,300
Total	$	62,976			$	67,600			Total	$	50,555			$	57,000
									Long-term debt	$	60,000			$	73,000
									Owners’ equity
									Common stock and paid-in surplus	$	44,000			$	44,000
									Accumulated retained earnings		237,116				256,000
Fixed assets
Net plant and equipment	$	328,695			$	362,400			Total	$	281,116			$	300,000
Total assets	$	391,671			$	430,000			Total liabilities and owners’ equity	$	391,671			$	430,000

SMOLIRA GOLF, INC. 2012 Income Statement
Sales					$	373,473
Cost of goods sold						254,500
Depreciation						32,800
Earnings before interest and taxes					$	86,173
Interest paid						14,700
Taxable income					$	71,473
Taxes (40%)						28,589
Net income					$	42,884
Dividends	$	24,000
Retained earnings		18,884

  

The company's profit margin is percent. (Use year-end figures rather than average values where appropriate. Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) Total asset turnover is . (Round your answer to 2 decimal places. (e.g., 32.16)) Equity multiplier is . (Round your answer to 2 decimal places. (e.g., 32.16)) Using the Du Pont Identity, the company's ROE is percent. (Do not include the percent sign (%). Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Explanation:

	Total asset turnover	=	Sales / Total assets
	Total asset turnover	=	$373,473 / $430,000 = 0.87 times

     

	Debt-equity ratio	=	Total debt / Total equity
	Debt-equity ratio 2012	=	($57,000 + 73,000) / $300,000 = 0.43 times

  

	Equity multiplier	=	1 + D/E
	Equity multiplier 2012	=	1 + 0.43 = 1.43 times

    

	Profit margin	=	Net income / Sales
	Profit margin	=	$42,884 / $373,473 = 0.1148, or 11.48%

    

The DuPont identity is:

ROE = (PM)(TAT)(EM)

ROE = (0.1148)(0.87)(1.43) = 0.1429, or 14.29%