Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (10% of the project grade).

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For the last three years, Return on Equity (ROE), were these:

2018: 11.9%
2019: 12.2%
2020: 14.3%

These numbers can be further broken down using the DuPont Analysis. They are Net Profit Margin (Asset Turnover), Equity Multiplier and Asset Turnover. This is how each component should be calculated:

•Net Profit Margin = Net Income/Total Sales

2018: 0.119/1 = 11.9% 2019: 0.122/1 = 12.2% 2020: 0 143/1 = 14.3%

•Asset Turnover = Total Sales/Total Assets

2018 : 1 / 20=0 .05 2019 : 1 / 21=0 .048 2020 : 1 / 22=0 .045

•Equity Multiplier = Total Assets / Shareholder’s Equity

2018 : 20 / 10=2 2019 : 21 / 11=1 .91 2020 : 22 / 12=1 .83

Analyzing each part of the ROE equation will give investors insight as to how well an organization uses its assets and equity to generate profit over time. Investors can make more informed decisions regarding potential investments, growth opportunities within their portfolios.

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