Scott Kelly is reviewing MasterToy's financial statements in order to estimate its sustainable growth rate. Consider the
Question:
Scott Kelly is reviewing MasterToy's financial statements in order to estimate its sustainable growth rate. Consider the information presented in the following exhibit.
a. Identify and calculate the components of the DuPont formula.
b. Calculate the ROE for 2014 using the components of the DuPont formula.
c. Calculate the sustainable growth rate for 2014 from the firm's ROE and plowback ratios.
MasterToy Inc.: Actual 2013 and estimated 2014 financial statements for fiscal year ending December 31 (S million, except per-share data) 2 change (96) 7.6% 0 8.4 8.6 Average shares outstanding (milllons) Net property, plant, and equipment Total llabillties and equity r share
Step by Step Answer:
a b c g ROE Plowback ROE Net profits Sales Assets ...View the full answer
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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