The following information is available for the year ended December 31, Year 1:
$\begin{array}{lc}
\text { Net income } & \$ 844,200 \
\text { Net sales } & 6,809,000 \
\text { Average total assets } & 5,911,000\\text { Average shareholders' equity }&2,575,000
\end{array}$
-Refer to the figure Red Oak Manufacturing.What is the total leverage per the DuPont analysis computation?

Question

The following information is available for the year ended December 31, Year 1:
 $\begin{array}{lc}
\text { Net income } & \$ 844,200 \
\text { Net sales } & 6,809,000 \
\text { Average total assets } & 5,911,000\\text { Average shareholders' equity }&2,575,000
\end{array}$
-Refer to the figure Red Oak Manufacturing.What is the total leverage per the DuPont analysis computation?

Quizplus · Accepted Answer

The total leverage in DuPont analysis is calculated as the ratio of average total assets to average shareholders' equity: $ \frac{5,911,000}{2,575,000} = 2.30 $.

The Following Information Is Available for the Year Ended December