Calculate return on equity using the dupont system

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Reference no: EM132545820 , Length: 20

The completed report should include:

  • An introduction to the company, including background information.
  1. A financial statement review.
  • Pro Forma financial statements (Balance Sheet and Income Statement) for the next two fiscal years, assuming a 10% growth rate in sales and Cost of Goods Sold (COGS) for each of the next two years.

A ratio analysis for the last fiscal year using at least two ratios from each of the following categories:

  1. Liquidity
  2. Financial leverage
  3. Asset management
  4. Profitability
  5. Market value

Question 1: Calculate Return on Equity (ROE) using the DuPont system.

Question 2: Assess management performance by calculating Economic Value Added (EVA).

Question 3: Evaluate the soundness of the company's financial policies (e.g. capital structure, debt, leverage, dividend policy, etc.) based on the material covered during class.

  • A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.

Reference no: EM132545820

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