Use the following ratio information for Jordan International and the industry averages for Jordan's line of business
Question:
Use the following ratio information for Jordan International and the industry averages for Jordan's line of business to:
a. Construct the DuPont system of analysis for both Jordan and the industry.
b. Evaluate Jordan (and the industry) over the 3-year period.
c. Indicate in which areas Jordan requires further analysis. Why?
Jordan 2011 Financial leverage multiplier Net profit margin Total asset turnover 2010 1.75 0.059 2.11 1.75 0.058 2.18 2012 1.85 0.049 2.34 Industry Averages Financial leverage multiplier Net profit margin Total asset turnover 1.67 0.054 2.05 1.69 0.047 2.13 1.64 0.041 2.15
Step by Step Answer:
a Margin Turnover ROA FL Multiple ROE 2012 Jordan 49 234 1147 185 2121 Industry 41 215 882 164 1446 ...View the full answer
Principles of Managerial Finance
ISBN: 978-1408271582
Arab World Edition
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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