Please use the financial ratios below to evaluate and each company’s performance relative to the other three companies in the industry. Please be more specific. Net profit margin Total asset turnover Assets-to-Equity Ratio ROE Axel Co. 19% 1.53 3.4 98.8% Blue Co 6% 1.88 1.6 18.0% Carol Co. 10% 1.00 1.06 10.6% David Co. 4% 1.11 1.8 8.0%
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Please use the financial ratios below to evaluate and each company’s performance relative to the other three companies in the industry. Please be more specific.
|
|
Net profit margin |
Total asset turnover |
Assets-to-Equity Ratio |
ROE |
|
Axel Co. |
19% |
1.53 |
3.4 |
98.8% |
|
Blue Co |
6% |
1.88 |
1.6 |
18.0% |
|
Carol Co. |
10% |
1.00 |
1.06 |
10.6% |
|
David Co. |
4% |
1.11 |
1.8 |
8.0% |
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- From the Google Finance site, use the DuPont analysis to determine the total assets turnover ratio for each of the peer companies. (Hint ROA = Profit margin Total assets turnover.) Once youve calculated each peers total assets turnover ratio, then you can use the DuPont analysis to calculate each peers equity multiplier.The average liabilities, average stockholders' equity, and average total assets are as follows: 1. Determine the following ratios for both companies, rounding ratios and percentagesto one decimal place: a. Return on total assets b. Return on stockholders' equity c. Times interest earned d. Ratio of total liabilities to stockholders' equity 2. Based on the information in (1), analyze and compare the two companies'solvency and profitability. Comprehensive profitability and solvency analysis Marriott International, Inc., and Hyatt Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two companies is as follows for a recent year (in millions): Balance sheet information is as follows:5. Profitability ratios Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Diusitech Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Diusitech Inc.'s income statement for the last two years. The company had assets of $4,700 million in the first year and $7,518 million in the second year. Common equity was equal to $2,500 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Diusitech Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 2,540 2,000 1,610 1,495 127 80 1,737 803 80 723 181 542 Net Sales Operating costs except depreciation and…
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- 1. The Wilson Corporation has the following relationships:Sales/Total assets 2.0Return on assets (ROA) 4.0%Return on equity (ROE) 6.0%What is Wilson’s profit margin and debt ratio?DuPont system of analysis Use the following financial information for AT&T and Verizon to conduct a DuPont system of analysis for each company. Sales Earnings available for common stockholders Total assets Stockholders' equity a. Which company has the higher net profit margin? Higher asset turnover? b. Which company has the higher ROA? The higher ROE? c. Which company has the higher financial leverage multiplier? a. Net profit margin (Round to three decimal places.) AT&T Net profit margin AT&T $164,000 13,333 403,921 201,934 Verizon Verizon $126,280 13,608 244,280 24,232Below are financial ratios for XYZ Corporation and comparative ratios for XYZCorporations industry. The ratios for XYZ Corporation are computed usinginformation from its financial statements. XYZ Corporation:Current Ratio - 3.45, Return on assets - 31.4%, Gross Profit - 36%, Net Profit Margin - 8.2%, Fixed Asset Turnover - 15.3Industry Average:Current Ratio - 3.10, Return on assets - 30%, Gross Profit - 34.3%, Net Profit Margin - 8.0%, Fixed Asset Turnover - 15.55__________________________________________________________Required:Interpret the ratios of XYZ Corporation and draw conclusions about the company’sfinancial performance and financial condition with full knowledge of the industryratios.
