Alpha’s competitors use FIFO for inventory costing. The market value of Alpha Corporation at December 31, 2019 was $3,000,000. Rental revenues were derived from a short-term lease of an unused portion of the Building which will be put back to use after the end of the lease. Using the financial statements, accounting policies and notes, and the additional information above, provide the following as a basis for a future comparison of Alpha Corporation to competitor ratios and industry benchmarks: 1. A decomposition of ROE using a 5-way DuPont Analysis showing all the components (e.g., interest burden, tax burden, etc.) (10 points) 2. A decomposition of ROE into operating return and nonoperating return and the components comprising each (e.g., NOPM, NOAT, FLEV etc.) (10 points) 3. Compute cash conversion cycle. What will be the change in cash if the company reduced its the cash conversion cycle by 1 day? (5 points) 4. Compute PPE turnover and percentage of PPE used up. Comment briefly. (5 points) 5. A summary of specific results from your analysis that you would be especially interested in comparing Alpha Corporation to its competitors in a future analysis. (5 points) 6. What is Alpha’s bad debt expense for 2019. Would you consider this significant? Explain briefly. (5 points)

Answer rating: 100% (QA)

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