Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A firm’s Balance Sheet and Income Statement for FY 2021 is displayed below and in the in the attached excel file. Answer the following questions.

 

NOTE: For this question, use the end-of-the year approach (and not the mid-year convention). For example, this means that days receivables = end of FY receivables/daily sales; similarly for the remaining relevant ratios.

 

You may use the tables below

 

 

BALANCE SHEET

2021

Cash and cash equivalents

280

Receivables

2588

Inventory

2516

Other

189

TOTAL CA

5573

Fixed assets

5024

TOTAL ASSETS

10597

Accounts payable

4713

Short term debt

78

TOTAL CL

4790

LT debt

921

Shareh. Equity

4886

TOTAL LIAB. AND SHARH. EQUITY

10597

   

INCOME STATEMENT

2021

Sales

19418

COGS

13136

Depreciation

354

SG&A

4952

EBIT

976

Interest  Expenses

52

Tax

268

Net income

656

 

  1. Decompose the return on equity for the FY 2021 in its five components.

 

4.4 ROE decomposition

2021

 Tax Effect

 

 Financial Cost Effect

 

 Operating Margin

 

 Invested Capital Turnver

 

 Financial structure Effect

 

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