72 PART 1 Introduction to Managerial Finance
FIGURE 2.2 DuPont System of Analysis
The DuPont system of analysis with application to Bartlett Company (2003)
Sales
$3,074,000
minus
Cost of
Goods Sold
$2,088,000
minus
divided by
Operating
Expenses
Income $568,000
Statement
minus
Interest
Expense
$93,000
minus
Taxes
$94,000
minus
Preferred Stock
Dividends
$10,000
Earnings
Available
for Common
Stockholders
$221,000 Net Profit
Margin
7.2%
Sales
$3,074,000
divided by
multiplied
by
multiplied
by
Sales
$3,074,000
Total Asset
Turnover
0.85
Common Stock
Equity
$1,754,000
Total Assets
$3,597,000
Return on
Common
Equity (ROE)
12.6%
plus
divided by
Total
Liabilities
$1,643,000
Financial
Leverage
Multiplier (FLM)
2.06
Return on
Total Assets
(ROA)
6.1%
Total Liabilities
and Stockholders’
Equity = Total
Assets
Stockholders’Equity $3,597,000
$1,954,000
Current
Assets
$1,223,000
plus
Net Fixed
Assets
$2,374,000
Current
Liabilities
$620,000
plus
Long-Term
Debt
$1,023,000
BalanceSheet