10.00 points Bethesda Mining Company reports the following balance sheet informa
ID: 2809924 • Letter: 1
Question
10.00 points Bethesda Mining Company reports the following balance sheet information for 2013 and 2014. BETHESDA MINING COMPANY Balance Sheets as of December 31, 2013 and 2014 2014 2013 2014 Assets Liabilities and Owners' Equity Current assets Current liabilties $ 21,396$24,385 Accounts payable 214,414 $ 192,480 99,022134,508 $ 313,436 $326,988 s 271,700 285,300 Common stock ad paid-in surplus $200,000 s200,000 51,552 121,807 58,318 Notes payable 143,615 Inventory Total Total $ 194,755 $ 226,318 Long-term debt 132,481171,358 $ 332,481 $371,358 983 646 Total liabilities and owners' equity $ 917,617 983,646 Accumulated retained earnings Fixed assets Total Net plant and equipment $722,862 $ 757,328 Total assets 917,617 year ending December 31, 2014. Required Calculate the DuPont identity. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g. 32.16).) Profit margin Total asset turnover times for C...Explanation / Answer
Solution:
Sales = $2,945,376
Net profit = $89,351
Net profit margin = Net profit / Sales = $89,351 / $2,945,376 = 3.034%
Answer rounded to 2 digits = 3.03%
Total asset turnover = Sales / Average assets
Asset in 2013 = $917,617 Asset in 2014 = 983,646
Average assets = ($917,617+983,646 )/2 = $950,631.5
Total asset turnover = $2,945,376 / $950,631.5 = 3.098336
Answer: 3.10
Equity in 2013 = $332,481 Equityin 2014 = 371,358
Average Equity= ($332,481+371,358 )/2 = 351,919.5
Average Asset = $950,631.5
Equity multiplier = Asset / Equity = $950,631.5 / 351,919.5 = 2.701275
Ans: 2.70
Using Dupont, ROE = Net profit margin * total asset turnover * Equity multiplier
= 3.03% * 3.10 *2.70 = 25.39%
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.