14. Perform an analysis of the firm XYZ's financial position using the DuPont equation. The most...

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14. Perform an analysis of the firm XYZ's financial position using the DuPont equation. The most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratio ROE Profit Margin Total Asset Turnover Equity Multiplier Cash XYZ's Balance Sheet as of December 31, 2022 (Millions of Dollars) 10 375 Accounts payable Notes payable Accruals Total current 615 1,000 liabilities Long-term Debt Total liabilities Total stockholder's Accounts receivable Inventories Total current assets Net fixed assets Total assets 1,000 2,000 15% 5% 1.8 1.67 Total operating costs EBIT Interest expenses EBT Tax expenses Net income equity Total liabilities and equity XYZ's Income Statement for Year Ended December 31, 2022 (Millions of Dollars) Net sales 3,000 (2,716.2) 283.8 60 110 140 310 (88) 195.8 (78.3) 117.5 750 1060 940 2,000 a. What are XYZ's ROE? Is it greater than or lower than its industry average? b. What are XYZ's profit margin? c. What are XYZ's total asset turnover? d. What are XYZ's equity multiplier? e. Write down the DuPont equation for firm XYZ and the industry, respectively. f. Analyze Firm XYZ's ROE in year 2022 using the DuPont equation. Explain why it ROE is greater than or lower than its industry average based on your analysis. 14. Perform an analysis of the firm XYZ's financial position using the DuPont equation. The most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratio ROE Profit Margin Total Asset Turnover Equity Multiplier Cash XYZ's Balance Sheet as of December 31, 2022 (Millions of Dollars) 10 375 Accounts payable Notes payable Accruals Total current 615 1,000 liabilities Long-term Debt Total liabilities Total stockholder's Accounts receivable Inventories Total current assets Net fixed assets Total assets 1,000 2,000 15% 5% 1.8 1.67 Total operating costs EBIT Interest expenses EBT Tax expenses Net income equity Total liabilities and equity XYZ's Income Statement for Year Ended December 31, 2022 (Millions of Dollars) Net sales 3,000 (2,716.2) 283.8 60 110 140 310 (88) 195.8 (78.3) 117.5 750 1060 940 2,000 a. What are XYZ's ROE? Is it greater than or lower than its industry average? b. What are XYZ's profit margin? c. What are XYZ's total asset turnover? d. What are XYZ's equity multiplier? e. Write down the DuPont equation for firm XYZ and the industry, respectively. f. Analyze Firm XYZ's ROE in year 2022 using the DuPont equation. Explain why it ROE is greater than or lower than its industry average based on your analysis.

Answer rating: 100% (QA)

a To calculate XYZs ROE Return on Equity we need to divide the Net Income by the Total Stockholders ... View the full answer