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# Using the DuPont Model to Compute ROI

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Using the DuPont model, perform ROI analysis for the following:

a. Firm D has net income of \$83,700, sales of \$2,790,000, and average total assets of \$1,395,000. Calculate the firm's margin, turnover, and ROI.

b. Firm E has net income of \$150,000, sales of \$2,500,000, and ROI of 15%. Calculate the firm's turnover and average total assets.

c. Firm F has ROI of 12.6%, average total assets of \$1,730,159, and turnover of 1.4. Calculate the firm's sales, margin, and net income. Round your answers to the nearest whole numbers.

#### Solution Preview

Using the DuPont model, perform ROI analysis for the following:

a. Firm D has net income of \$83,700, sales of \$2,790,000, and average total assets of \$1,395,000. Calculate the firm's margin, turnover, and ROI.

Margin = Net income / Sales
Margin = \$83,700 / \$2,790,000
Margin = 3.00%

Turnover = Sales / Average ...

#### Solution Summary

This solution illustrates how to use the DuPont Model to compute ROI given different pieces of information.

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