An analyst examining Royal Dutch Shell PLC (Amsterdam and London SEs: RDSA) wishes to understand the factors
Question:
An analyst examining Royal Dutch Shell PLC (Amsterdam and London SEs: RDSA) wishes to understand the factors driving the trend in ROE over a recent four-year period.
The analyst obtains and calculates the following data from Shell’s annual reports:
What might the analyst conclude?
Transcribed Image Text:
ROE Tax burden Interest burden EBIT margin Asset turnover Leverage 2009 9.53% 60.50% 97.49% 7.56% 0.99 2.15 2008 20.78% 52.10% 97.73% 11.04% 1.71 2.17 2007 26.50% 63.12% 97.86% 13.98% 1.47 2.10 2006 24.72% 58.96% 97.49% 13.98% 1.44 2.14 "Shell's income statement does not present a separate subtotal for operating income. EBIT was calculated as Earnings before taxes plus interest.
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The tax burden measure has varied with no obvious trend In the most recent year 2009 taxes declined ...View the full answer
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Related Book For
International Financial Statement Analysis CFA Institute Investment Series
ISBN: 9780470287668
1st Edition
Authors: Thomas R. Robinson, Hennie Van Greuning CFA, Elaine Henry, Michael A. Broihahn, Sir David Tweedie
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