SNHU acc 202 (DuPontanalysis)How is the equity multiplier related to the firm's use of debt financing (i.e., if the firm increased its use of debt financing would this increase or decrease itsequity multi plier)? Explain. What is the firm's equity multiplier? The equity multiplier is given by:The equity multiplier is. (Round to two decimal places.)Garwryk, Inc., which is financed with debt and equity, presently has a debt ratio of percent. What is the firm's equity multiplier?Equity Multiplier =1- Debt RatioHow is the equity multiplier related to the firm's use of debt financıng (1.e., it the firm increased its use of debt financing would this increase or decrease itsequity multiplier)? Explain.A. If the company decreases its debt financing it willincreaseits debt ratio, therefore it will increase its equity multiplier.(Select the best choice below.)B. If the company increases its debt financing it will increase its debt ratio, therefore it will decrease its equity multiplier.C. If the company increases its debt financing it will decrease its debt ratio, therefore it willdecrease its equity multiplier.D. If the company increases its debt financing it will increase its debt ratio, therefore it will increase its equity multiplier.(Related to Checkpoint 4.3) (Profitability analysis)Last year the P. M. Postem Corporation had sales of, with a cost of goods sold of . The firm's operating expenses were , and its increase inretained earnings was. There are currently shares of common stock outstanding, the firm pays a dividend per share, and the firm has no interest-bearing debt.Assuming the firm's earnings are taxed at percent, construct the firm's income statement.Compute the firm's operating profit margin.Assuming the firm's earnings are taxed at, construct the firm's income statement.a.b.a.Complete the income statement below:(Round to the nearest dollar.)Income StatementRevenues$Cost of Goods SoldGross Profit$Operating ExpensesNet Operating IncomeInterest ExpenseEarnings before Taxes$Income TaxesNet Income$b. Compute the firm's operating profit margin.The operating profit margin is %. (Round to one decimal place.) (Efficiency analysis) Baryla Inc. manufactures high quality decorator lamps in a plant located in eastern Tennessee. Last year the firm hadsales of $103 million and a gross profit margin of 35 percent.a.How much inventory can Baryla hold and still maintain an inventory turnover ratio of at least6.2 times? The amount of inventory that Baryla can hold is $---_million.(Round to one decimal place.)b. Currently, some of Baryla's inventory includes $1.9 million of outdated and damaged goods that simply remain in inventory and are notsalable. What inventory turnover ratio must the good inventory maintain in order to achieve an overall turnover ratio of at least 6.2(including the unsalable items)?The inventory turnover ratio that the good inventory must have istimes.(Round to one decimalplace.)2The King Carpet Company has $2,990,000 in cash and a total of $12,780,000(Liquidity Analysis)in current assets. The firm's current liabilities equal $6,040,000 such that the firm's current ratio equals 2.1. The company's managers wantto reduce the firm's cash holdings down to $1,080,000 by paying $501,000 in cash to expand the firm's truck fleet and using $1,409,000 incash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio? The new current ratio is ---(Round to one decimal place.)3(Capital structure analysis)Last year the Rondoelea Products Company had $134 million in annual sales and a net profit margin of 9.6percent. In addition, Rondoelea's average tax rate was 30 percent. If Rondoelea had $37 million of debt outstanding with an average interestrate of 10.7 percent, what is the firm's times interest earned ratio?The times interest earned ratio istimes.(Round to one decimalplace.)4(DuPont analysis) Dearborn Supplies has total sales of $194 million, assets of $99 million, a return on equity of 28 percent, and a net profitmargin of 7.6 percent. What is the firm's debt ratio?The company's debt ratio is%. (Round to one decimal place.)(Capital structure analysis) The Karson Transport Company currently has net operating income of $494,000 and pays interest expense of$194,000. The company plans to borrow $1.05 million on which the firm will pay 12 percent interest. The borrowed money will be used tofinance an investment that is expected to increase the firm's net operating income by $397,000 a year.a. What is Karson's times interest earned ratio before the loan is taken out and the investment is made?The times interest earned ratio is times. (Round to two decimal places.)b. What effect will the loan and the investment have on the firm's times interest earned ratio?The new times interest earned ratio is times. (Round to two decimal places.)

" Since you asked multiple questions, we will answer the first question for you as per the guidelines. Kindly repost the question by specifying the question you want us to answer. Thank you." Equity Multiplier is the financial leverage ratio that shows the percentage of assets owned by the shareholders' equity. In other words, It is the ratio which measures that how much of total assets are financed through shares or shareholders. Investors always prefer to invest in a low equity multiplier company as it indicated that the company is using less debt financing and more equity financing which shows the long-term solvency of the company. Equity Multiplier is calculated by using the following formula: Equity Multiplier = 11-Debt Ratio Equity Multiplier is related to debt ratio. The debt ratio is the ratio that measures the percentage of total assets financed through debt. It is calculated by the following formula: Debt Ratio=Total DebtsTotal Assets If the company increases its debt financing, the debt ratio will increase and if the debt ratio will increase, it will increase the equity multiplier. Let's understand with the help of an example: Let Total Assets be $100,000 Debt Financing is $60,000 Therefore, the Debt Ratio will be: Debt Ratio=Total DebtsTotal Assets=$60,000$100,000=0.6 If the Debt Ratio is 0.6, then Equity Multiplier will be: Equity Multiplier = 11-Debt Ratio=11-0.6=2.5 If the company decides to increase the debt financing to $70,000, the debt ratio will be: Debt Ratio=Total DebtsTotal Assets=$70,000$100,000=0.7 If the Debt ratio is 0.7, then the equity multiplier will be: Equity Multiplier = 11-Debt Ratio=11-0.7=3.33 We can see that, with the increase in debt financing, the debt ratio will increase which will increase the equity multiplier. This shows that there is a direct relationship between debt financing, debt ratio, and equity multiplier. The higher the debt financing, the higher the Debt ratio, and the higher will be the equity multiplier and vice-versa. Answer: Option -D is the correct answer.