Solution-Would their asset turnover need to be

Would their asset turnover need to be

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Reference no: EM13343773

1.Find online the annual 10-K for Peet’s Coffee and Tea (PEET) for 2008.

a. Compute Peet’s net profit margin, total asset turnover, and equity multiplier.

b. Use this data to compute Peet’s ROE using the DuPont Identity.

c. If Peet’s managers wanted to increase its ROE by one percentage point, how much higher would their asset turnover need to be?

d. If Peet’s net profit margin fell by one percentage point, by how much would their asset turnover need to increase to maintain their ROE?

2.Repeat the analysis of parts (a) and (b) in Problem 1 for Starbucks Coffee (SBUX). Use the DuPont Identity to understand the difference between the two firms’ ROEs.

Reference no: EM13343773

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Would their asset turnover need to be

Reference no: EM13343773

Reference no: EM13343773

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