Refer to Rhodes Bakery At December 31,Year 1,the Company's Total Assets and Total Shareholders

question 128

Essay

Refer to Rhodes Bakery.Perform DuPont Analysis for Year 3 and Year 2,including the three components of return on equity (ROE).Round your answers to two decimal places,then comment on the company's relative ROE from Year 2 to Year 3.
Additional information is available below:
$\begin{array}{lrr}&\text { Year } 3 & \text { Year } 2\\\text { Total sales } & \$ 500,000 & \$ 410,000 \\\text { Net income } & \$24,000 & \$ 28,750\end{array}$
At December 31,Year 1,the company's total assets and total shareholders' equity were $325,000 and $287,500,respectively.

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Definitions:

Inequality

The state of not being equal, especially in status, rights, and opportunities, often focusing on issues related to social, economic, or political disparity.

Social-Contract Theorist

A philosopher who argues that the legitimacy of authority arises from an implicit agreement between the governed and the government.

Civil Disobedience

The act of deliberately refusing to comply with certain laws or demands of a government, as a form of peaceful protest.

Hobbes

An English philosopher best known for his political philosophy, especially regarding the structure of society and legitimate government authority.