A company’s comparative statements are given below. Please conduct the following analyses:c. Calculate the three profitability ratios for year 2017 and show how ROE can be derived from the DuPont formula for this company.d. What do the analyses tell you about the company’s financial performance? Year ended December 31,(in millions)201820172016Revenue$5,000$4,000$3,000COGS(3,200)(3,000)(2,500)Gross Profit1,8001,000500Depreciation(500)(450)(400)SG&A(300)(300)(300)Interest(50)(50)(50)Earnings Before Tax950200(250)Таx(225)(20)Net Earnings725180-250 Year ended December 31,(in millions)201820172016ASSETSCash$5,405$6,680$7,000Accounts Receivable2,0002,5001,000Inventory15,00012,00014,000Current Assets22,40521,18022,000Property Plant & Equipment50,00045,00040,000Total Assets72,40566,18062,000LIABILITIESCurrent Portion of Debt$3,000$2,000$3,500Accounts Payable1,0001,5001,000Current Liabilities4,0003,5004,500Long Term Debt25,00020,00015,000Total Liabilities29,00023,50019,500EQUITYShare CapitalRetained EarningsShareholders' EquityTotal Liabilities & Equity30,00030,00030,00013,40512,68012,50043,40542,68042,50072,40566,18062,000

Details from the question : No. Particulars Amount $ 1 Gross profit for 2017 1,000 2 Revenue…

A company’s comparative statements are given below. Please conduct the following analyses: c. Calculate the three profitability ratios for year 2017 and show how ROE can be derived from the DuPont formula for this company. d. What do the analyses tell you about the company’s financial performance?

A company’s comparative statements are given below. Please conduct the following analyses: c. Calculate the three profitability ratios for year 2017 and show how ROE can be derived from the DuPont formula for this company. d. What do the analyses tell you about the company’s financial performance?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: If a company Is comparing this year's financial performance to last year's flnancial performance, it…

A: Comparative Financial statements or also called horizontal analysis are used to compare the item of…

Q: Briefly describe the ratios that can be used to evaluate a company’s profitability.

Q: For each individual ratio for each company, Your comments for each ratio should include more than…

A: Accounting Ratios are the financial tools used by an investor to interpret the financial statements…

Q: There was a bit of concern about one of RBL's newer entities - RBL Paving Company. Management wants…

A: Ratios analysis can be referred as the measure of company's financial health and its performance in…

Q: Specialty Department Stores' chief executive officer (CEO) has asked you to compare the company's…

A: Vertical analysis is used to assess the relative proportion of items in the income statement and…

Q: Brothers Mike and Tim Hargenrater began operations of their tool and die shop (H & H Tool, Inc.) on…

A: Journal EntryThe date, the amount to be credited and debited, a brief description of the…

Q: . Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset…

A: Ratio analysis is a technique used to evaluate the financial performance of a company by analyzing…

Q: I need assistance on the following regarding the attached balance sheet and income statement:…

A: Dividend payout ratio represents the percentage of earnings distributed as dividends in any…

Q: Using the fiscal year end 2020 annual report for General Mills, Inc. and the figures from the 2020…

A: Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational…

Q: Compare the performance of both companies with each other, for each of the calculated indicators and…

A: here Merck and j&j are two companies that we are comparing each other whose performance is…

Q: Use the information provided from Sapphire Ltd to calculate the ratios for 2022 (expressed to two…

A: Let's calculate each of the requested ratios based on the provided financial data for Sapphire Ltd…

Q: A company’s comparative statements are given below. Please conduct the following analyses (hint:…

A: Since the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the…

Q: a. Profitability Ratios Profit margin % Return on Assets % Return on Equity % b. Asset…

A: First let us list the formula used to compute the values. Net profit margin = Net income/…

Q: Below is the balance sheet and income statement for Chin Corporation. You are needed to analyze the…

A: Following is the horizontal, vertical and ratio analysis

Q: The following condensed information is reported by World of Stamp Collectibles. Income Statement…

A: RATIO ANALYSISRatio analysis is the process of determining and interpreting numerical relationships…

Q: Use for financial statements for Yellow Hammer to answer problems 1-3 L. Assess Yellow Hammer's…

A: 1) EBITDA - Earnings Before Interest ,Taxes, Depreciation & Amortization. Particulars Year…

Q: The image uploaded is the calculation of Socite Generale Bank, Ghana, Profitability ratios, shorter…

A: The study or analysis of the line items included in the company's financial statements is known as…

Q: Income statement and balance sheet data for The Athletic Attic are provided below.Required: 1.…

A: Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Show how the ROCE ratio for ABC Ltd. the company that we have been discussing this week can be…

A: Based on the provided sources, Return on Capital Employed (ROCE) is a crucial financial ratio used…

Q: the company BMO

A: Financial Results Highlights 4th Quarter 2021 vs. 4th Quarter 2020: Net income increased by 36% to…

Q: DuPont system of analysis Use the following financial information for AT&T and Verizon to conduct a…

A: Performance in terms of asset utilization, profit earning ability, equity returns, etc. of two or…

Question

A company’s comparative statements are given below. Please conduct the following analyses:

c. Calculate the three profitability ratios for year 2017 and show how ROE can be derived from the DuPont formula for this company.

d. What do the analyses tell you about the company’s financial performance?

Year ended December 31,
(in millions)
2018
2017
2016
Revenue
$5,000
$4,000
$3,000
COGS
(3,200)
(3,000)
(2,500)
Gross Profit
1,800
1,000
500
Depreciation
(500)
(450)
(400)
SG&A
(300)
(300)
(300)
Interest
(50)
(50)
(50)
Earnings Before Tax
950
200
(250)
Таx
(225)
(20)
Net Earnings
725
180
-250

Year ended December 31,
(in millions)
2018
2017
2016
ASSETS
Cash
$5,405
$6,680
$7,000
Accounts Receivable
2,000
2,500
1,000
Inventory
15,000
12,000
14,000
Current Assets
22,405
21,180
22,000
Property Plant & Equipment
50,000
45,000
40,000
Total Assets
72,405
66,180
62,000
LIABILITIES
Current Portion of Debt
$3,000
$2,000
$3,500
Accounts Payable
1,000
1,500
1,000
Current Liabilities
4,000
3,500
4,500
Long Term Debt
25,000
20,000
15,000
Total Liabilities
29,000
23,500
19,500
EQUITY
Share Capital
Retained Earnings
Shareholders' Equity
Total Liabilities & Equity
30,000
30,000
30,000
13,405
12,680
12,500
43,405
42,680
42,500
72,405
66,180
62,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

The image uploaded is the calculation of Societe Generale Profitability ratios, shorter liquidity ratios, long-term liquidity ratios, and investment ratios for 2020, 2021, 2022. A base year of 2019 was also added. Evaluate the financial performance by comparing the three (3) years' financial performance that is 2020, 2021, and 2022 I have provided in the table with the base year.
Your Task… Using your assigned financial statements calculate the required ratios below Indicate if the change from year to year is favorable or unfavorable. All values should be accurate to at least two decimal places. The expectation is to submit a professional report free of grammar and spelling errors and easy to read. Think of this as a menu you would be handing to a customer. All calculations are to be represented. Analysis of Profitability Gross Profit Ratio Operating Profit Ratio Net Profit Ratio Sales to Total Assets Ratio Return on Total Assets Return on Equity Earnings Per Share
Costco Financial Analysis. Perform the following ratio analysis for 2021, 2022, and 2023 for Costco using the attached financial statements. a. Profitability ratios b. Liquidity ratios c. Leverage ratios d. Activity ratios e. Price to earnings ratio
Calculate the following profitability ratios for 2018 and 2019. a. Gross profit ratio b. Return on assets c. Profit margin d. assets turnover
Calculate the ratios of Woolworths Group (Australian retail company) for the year 2021: Ratios to calculate: Profitability (ROSF, ROCE, Gross margin, Operating profit margin, Cash flow to Sales*) Efficiency (Inventory turnover period, Average settlement period, Sales revenue to capital employed) Liquidity (Current ratio, Acid test (quick) ratio, Cash flow ratio*). Stability/Capital Structure (Gearing ratio, Interest cover ratio, Debt coverage ratio*) Investment/Market Performance (Earnings per share, Price earnings ratio, Operating cash flow per share*)
Requirements 1. Prepare a comparative common-size income statement for Mariner Designs, Inc. using the 2024 and 2023 data. Round percentages to one-tenth percent. 2. To an investor, how does 2024 compare with 2023 ? Explain your reasoning
To evaluate a company’s performance, investors need a benchmark to which they can compare its financial ratios. What are some of the problems associated with these comparisons?
Use Table 1 and the following information on Company X to perform a pro-forma financial modeling using a percentage sales method, and answers the next questions. Note: When applying the percentage sales method, you should assume that the 2024 percentage values with respect to sales of the (i) costs except depreciation, (ii) depreciation, (iii) cash and equivalents, (iv) accounts receivable, (v) inventories, (vi) property, plant and equipment, and (vi) accounts payable will remain equal to those percentages of 2023. Sales in 2024 are expected to grow at a rate of 20%, with respect to the values of 2023. Assume also that the total values in 2024 of interest expense and debt will not change from its 2023 values; income tax will remain at 30% of the Pretax Income; and that Company X initially plans to payout 35% of its net income to its shareholders. 1. What is the forecasted value of sales for 2024? 2. What is the forecasted value of EBITDA for 2024? 3. What is the forecasted value of…
Please do not give image format
The image uploaded is the calculation of Cal Bank's Profitability ratios, shorter liquidity ratios, long-term liquidity ratios, and investment ratios for 2020, 2021, 2022. A base year of 2019 was also added. Evaluate the financial performance by comparing the three (3) years' financial performance that is 2020, 2021, and 2022 I have provided in the table with the base year.
You are provided with the Income Statement and the Balance Sheet of HTS software, Inc. for 2011.Required: (a) Calculate the ratios stated in the table below for HTS Software, Inc. for 2011 (b) Analyze the current financial position for the company from a time series and cross section viewpoint. (c) Break your analysis into an evaluation of the firm’s liquidity, activity, debt, profitability and market ratios.