Calculation of return on equity using the dupont system

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Reference no: EM131303519

Evaluation of Corporate Performance

The Final Paper will involve applying the concepts learned in class to an analysis of a company using data from its annual report. Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report either recommending or not recommending purchase of the company stock.

For help with reading an annual report access this handy guide from Money Chimp.

The completed report should include:

-An introduction to the company, including background information.  

-A complete and thorough financial statement review.

-Pro Forma financial statements (Balance Sheet and Income Statement) for the next fiscal year, assuming a 10 percent growth rate in sales and Cost of Goods Sold (COGS) for the next year.

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

  • Liquidity
  • Financial leverage
  • Asset management
  • Profitability
  • Market value
  • Debt
  • Per-Share
  • Measures of relative value (P/E, P/B)
  • Activity
  • Cash Flow

-A calculation of Return on Equity (ROE) using the DuPont system.

-Assessment of management performance by calculating Economic Value Added (EVA).

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

-Evaluate the financial risks associated with operating internationally.  If your chosen company does not operate internationally, evaluate what the financial risks could be if they were to expand internationally.

Reference no: EM131303519

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