The following are selected financial data in thousands of dollars for the Hunter Corporation.
2006 2005
Current Assets $ 500 $ 400
Fixed Assets, net $ 700 $ 600
Total Assets $ 1,200 $ 1,000
Current Liabilities $ 300 $ 200
Long Term Debt $ 200 $ 200
Common Equity $ 700 $ 600
Total Liabilities and Equity $ 1,200 $ 1,000
Net Sales $ 1,500 $ 1,200
Total Expenses $ (1,390) $ (1,100)
Net Income $ 110 $ 100
a. Calculate Hunters rate of return on total assets in 2006 and in 2005. Did the ratio improve or worsen?
b. Diagram the expanded DuPont system for Hunter for 2006. Insert the appropriate dollar amounts wherever possible.
c. Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed.