You are given financial statements and a Dupont analysis for Tesco and Ahold. What do you conclude about the two companies’ performances based on these numbers? Exhibit 6 DuPont Decomposition of Ahold and TescoXXx=DecomposingProfitabilityNI/SalesSales/Beg TotalAssetsBeg TotalAssets/Beg EquityROE(ROA*FinancialLeverage)FY20093.20%2.052.9019.07%AholdFY2010 FY20112.89%2.122.5615.68%3.36%1d Gum Can2.062.4917.21%FY20094.09%1.253.5318.11%Tesco2010FY20104.39%1.313.1318.19%FY20114.35%1.372.8416.97%

DuPont equation is used to calculate the return on equity by decomposing ROE in term of three…

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re given financial statements and a Dupont analysis for Tesco and Ahold. What do you conclude about the two compani

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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You are given financial statements and a Dupont analysis for Tesco and Ahold. What do you conclude about the two companies’ performances based on these numbers?

Exhibit 6 DuPont Decomposition of Ahold and Tesco
X
Xx
=
Decomposing
Profitability
NI/Sales
Sales/Beg Total
Assets
Beg Total
Assets/Beg Equity
ROE
(ROA*Financial
Leverage)
FY2009
3.20%
2.05
2.90
19.07%
Ahold
FY2010 FY2011
2.89%
2.12
2.56
15.68%
3.36%
1d Gum Can
2.06
2.49
17.21%
FY2009
4.09%
1.25
3.53
18.11%
Tesco
2010
FY2010
4.39%
1.31
3.13
18.19%
FY2011
4.35%
1.37
2.84
16.97%

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