In 2005 IBM had an ROE of 26 7 , but Hewlett Packards ROE was only 6 4 Use the DuPont framework to identify possible reasons for this difference based on the data below IBM HP NOPAT Sales 9 0 2 7 Sales Net Assets 2 16 2 73 Effective After Tax Interest Rate 2 4 1 1 Net Financial Leverage 0 42 0 16 ...

In 2005 IBM had an ROE of 26.7%, but Hewlett-Packards ROE was only 6.4%. Use the DuPont

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In 2005 IBM had an ROE of 26.7%, but Hewlett-Packard’s ROE was only 6.4%. Use the DuPont framework to identify possible reasons for this difference based on the data below:

	IBM	HP
NOPAT/Sales	9.0%	2.7%
Sales/Net Assets	2.16	2.73
Effective After-Tax Interest Rate	2.4%	1.1%
Net Financial Leverage	0.42	-0.16

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Business Analysis Valuation Using Financial Statements

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5th edition

Authors: Paul M. Healy

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In 2005 IBM had an ROE of 26.7%, but Hewlett-Packards ROE was only 6.4%. Use the DuPont

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Business Analysis Valuation Using Financial Statements

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