DuPont identity. For the firms in the popup window, , find the return on equity using the three components of the DuPont identity: operating efficiency, as measured by the profit margin (net income/sales); asset management efficiency, as measured by asset turnover (sales/total assets); and financial leverage, as measured by the equity multiplier (total assets/total equity). i Data Table Click on the following Icon e in order to past this table's content into a spreadsheet. Financial Information ($ in millions, 2013) Company Sales Net Income Total Assets Liabilities PepsiCo $66,325 $6,727 $77,499 $53,159 Coca-Cola $46,707 $8,442 $90,044 $56,747 McDonald's $28,050 $5,838 $36,559 $20,692
DuPont identity. For the firms in the popup window, , find the return on equity using the three components of the DuPont identity: operating efficiency, as measured by the profit margin (net income/sales); asset management efficiency, as measured by asset turnover (sales/total assets); and financial leverage, as measured by the equity multiplier (total assets/total equity). i Data Table Click on the following Icon e in order to past this table's content into a spreadsheet. Financial Information ($ in millions, 2013) Company Sales Net Income Total Assets Liabilities PepsiCo $66,325 $6,727 $77,499 $53,159 Coca-Cola $46,707 $8,442 $90,044 $56,747 McDonald's $28,050 $5,838 $36,559 $20,692
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Chapter 14, Question 5. This is part of the question. Am asking another question on Bartleby for the second part. Attached is a similar question with answers. Please answer the new question in the same format :)
Transcribed Image Text:# DuPont Identity Analysis
For the firms in the popup window, calculate the return on equity (ROE) using the three components of the DuPont identity:
- **Operating Efficiency**: Measured by the profit margin (Net Income/Sales).
- **Asset Management Efficiency**: Measured by asset turnover (Sales/Total Assets).
- **Financial Leverage**: Measured by the equity multiplier (Total Assets/Total Equity).
## Equity Calculation
- **PepsiCo**:
Equity is $24,293 million.
(Rounded to the nearest million dollars.)
- **Coca-Cola**:
Equity is $33,046 million.
(Rounded to the nearest million dollars.)
- **McDonald's**:
Equity is $15,999 million.
(Rounded to the nearest million dollars.)
## DuPont Identity Components
- **Profit Margin**:
- PepsiCo: 10.07% (Rounded to two decimal places.)
- Coca-Cola: 18.11% (Rounded to two decimal places.)
- McDonald's: 20.85% (Rounded to two decimal places.)
- **Asset Turnover**:
- PepsiCo: 0.8570 (Rounded to four decimal places.)
- Coca-Cola: 0.5198 (Rounded to four decimal places.)
- McDonald's: 0.7657 (Rounded to four decimal places.)
- **Equity Multiplier**:
- PepsiCo: 3.1885 (Rounded to four decimal places.)
## Data Table Overview
The table provides financial information of the companies for the year 2013, in millions of dollars:
| Company | Sales | Net Income | Total Assets | Liabilities |
|-----------|---------|------------|--------------|-------------|
| **PepsiCo** | $66,383 | $6,684 | $77,459 | $53,166 |
| **Coca-Cola** | $46,734 | $8,463 | $89,999 | $56,863 |
| **McDonald's** | $28,078 | $5,853 | $36,672 | $20,673 |
This information can be used to perform a detailed DuPont analysis, assisting in evaluating the financial performance and strategies of each company.
Transcribed Image Text:**DuPont Identity Analysis**
For the firms listed, calculate the return on equity using the three components of the DuPont Identity:
1. **Operating Efficiency** - Measured by the profit margin (Net Income/Sales).
2. **Asset Management Efficiency** - Measured by asset turnover (Sales/Total Assets).
3. **Financial Leverage** - Measured by the equity multiplier (Total Assets/Total Equity).
**Data Table**
The table provides financial information for the year 2013, expressed in millions of dollars.
| Company | Sales | Net Income | Total Assets | Liabilities |
|------------|---------|------------|--------------|-------------|
| PepsiCo | $66,325 | $6,727 | $77,499 | $53,159 |
| Coca-Cola | $46,707 | $8,442 | $90,044 | $56,747 |
| McDonald's | $28,050 | $5,838 | $36,559 | $20,692 |
This table is designed for easy transfer into a spreadsheet for further analysis. Use the data to calculate return on equity and analyze each company's financial performance using the DuPont model.
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