3-13. Data for Morton Chip Company and its industry averages follow.
a. Calculate the indicated ratios for Morton.
b. Construct the extended DU Pont equation for both Morton and the industry.
c. Outline Morton’s strengths and weaknesses as revealed by your analysis.
d. Suppose Morton had doubled its sales as well as its inventories, accounts receivables, and common equity during 2010. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.
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