Perform a Du Pont analysis on BestCare. Assume that the industry
a. Perform a Du Pont analysis on BestCare. Assume that the industry
average ratios are as follows:
Total margin 3.8%
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Total asset turnover 2.1
Equity multiplier 3.2
Return on equity (ROE) 25.5%
b. Calculate and interpret the following ratios for BestCare:
Industry Average
Return on assets (ROA) 8.0%
Current ratio 1.3
Days cash on hand 41days
Average collection period 7days
Debt ratio 69%
Debt-to-equity ratio 2.2
Times interest earned (TIE) ratio 2.8
Fixed asset turnover ratio 5.2
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