Perform a traditional Dupont Disaggregation by decomposing ROE into profit margin, asset turnover and financial leverage. What inferences can you draw from the disaggregation?

1. Perform a RNOA disaggregation by decomposing RNOA into NOPM and NOAT. What inferences can you draw from the disaggregation?
2. What is your assessment of the profitability of your firm in recent years? How does your firm's profitability compare with that of the competitor?
3. What factors (e.g., business environment, business strategies, and product mix) may distinguish your company's operating performance from that of its closest competitor?

	Nike (amounts in Millions)	Under Armour (amounts in Thousands)
Return On Assets	15.49%	7.19%
Return on Net Operating Assets	27.14%	14.44%
Accounts Receivable Turnover	10.23	10.37
Inventory Turnover	3.30	3.31
Accounts Payable Turnover	8.15	4.75
PPE Turnover	9.75	9.36
Times Interest Earned	33.44	9.82
Operating Cashflow to debt	0.21	0.24
Free Cashflow to Debt	0.18	0.21
Current Ratio	2.63	2.3
Quick Ratio	1.65	1.54
Liabilities-to-Equity Ratio	1.64	1.39
Total Debt-to-Equity Ratio	1.64	1.39

Answer rating: 100% (QA)

Lets start by performing the traditional Dupont Disaggregation for both companies Nike Return on Equity ROE Return on Assets ROA Financial Leverage RO... View the full answer