Base your answers to the following questions on the financial statements of H&M AB. in Appendix A (near the end of the book).
a. Calculate the growth in the following accounts from 2008 to 2009.
i. Sales (excluding VAT)
ii. Profit for the year
iii. Total assets
iv. Total equity
Would you expect each of these accounts to grow at the same rate? Why or why not? Comment on the growth rates you calculated.
b. Based on your analysis from part "a", do the equity investors finance more of the company in 2009 than they did in 2008?
c. Calculate the following ratios for each of the two years presented. (Note that, in order to be able to calculate these ratios for each of the years, you will have to use the total assets for each year and the total shareholders' equity for each year in your ratios, rather than average total assets and average shareholders' equity.)
i. Profit margin ratio
ii. Return on assets
iii. Return on equity
Comment on your results. Do the results from part "a" help you interpret the changes in these ratios?