You observe that return on equity has changed from 2019 to 2020. You want to analyse the reasons for the change in return on equity to evaluate whether you should invest in the stock. Drawing on your knowledge of Du Pont Analysis, calculate the return on equity and its drivers for 2019 and 2020. Discuss what these numbers indicate to you as a potential investor. You should briefly indicate in your answer which of your calculations is the primary driver behind the change in ROE. SalesCost of goods soldGross ProfitSelling, General and Administrative ExpensesDepreciation ExpenseOperating IncomeInterest ExpenseEarnings before taxIncome tax expenseNet incomeNOPAT was 400 in 2020 and 390 in 2019.AssetsCashIncome StatementHEALTHELIXIR Ltd.Year ended Dec 31, 2020Balance SheetHEALTHELIXIR Ltd.As at Dec 31, 2020Accounts receivableInventoriesTotal current assetsProperty, plant and equipmentAccumulated depreciationTotal assetsLiabilities and Shareholder's EquityAccounts PayableShort-term borrowingsSalaries payableTotal current liabilitiesLong-term borrowingsTotal liabilitiesShare capital, (at $1 per share)Retained earningsTotal shareholder's equityTotal Liabilities and Shareholder's Equityin $'000in $'0002020404604609604860(660)5160202031002760(1798) (1573)1302118735010015060010001600280076035605160(590)(140)572(100)472(142)330in $'0002019in $'0002019763603007363720(520)3936300701305005001000250043629363936(510)(120)557(500)57(17)40

The Dupont analysis is a way of calculating return on equity by considering three critical financial…

You observe that return on equity has changed from 2019 to 2020. You want to analyse the reasons for the change in return on equity to evaluate whether you should invest in the stock. Drawing on your knowledge of Du Pont Analysis, calculate the return on equity and its drivers for 2019 and 2020. Discuss what these numbers indicate to you as a potential investor. You should briefly indicate in your answer which of your calculations is the primary driver behind the change in ROE.

You observe that return on equity has changed from 2019 to 2020. You want to analyse the reasons for the change in return on equity to evaluate whether you should invest in the stock. Drawing on your knowledge of Du Pont Analysis, calculate the return on equity and its drivers for 2019 and 2020. Discuss what these numbers indicate to you as a potential investor. You should briefly indicate in your answer which of your calculations is the primary driver behind the change in ROE.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 15EA: The following select account data is taken from the records of Reese Industries for 2019. A. Use the...

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Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes. Income tax expense Net income Assets Current assets Long-term investments Plant assets, net Total assets Sin Comparative Income Statements For Years Ended December 31 2021 $ 420,027 252,856 167,171 59,644 37,802 97,446 69,725 12,969 $ 56,756 Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings Total liabilities and equity Assets Current assets Long-term investments Plant assets, net. Total assets Liabilities and Equity Current liabaties Common stock Other paid-in capital Retained earnings Total liabilities and equity 2020 $ 321,775 202,718 KORBIN COMPANY Comparative Balance Sheets December 31 2021 119,057 44,405 28,316 72,721 46,336 9,499 $ 36,837 $ 55,286 0 102,674 $ 157,960 2020 3. Complete the below table to calculate the balance sheet data in trend percents with 2019 as answers to 2 decimal places.) 111.77 % 0.00 $ 37,003 700…
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