Use the information about SyncTech, Inc. provided below. 

SyncTech B/S (in $ thousand): 

	FYE 2055	FYE 2054
Cash & cash equivalents	$ 882,210	$ 571,250
Receivables	771,580	775,250
Inventories	1,320,150	1,254,600
Other current assets	249,000	231,200
Net property, plant & equipment	1,118,750	1,100,300
Intangibles	263,050	241,000
Deposits & other long-term assets	184,500	168,250
Total assets	$4,789,240	$4,341,850
Accounts payable	$1,178,540	$1,061,100
Short-term debt	18,100	316,500
Accrued expenses	803,000	724,300
Long-term debt	478,250	378,400
Other long-term liabilities	13,350	0
Preferred stock	850,000	850,000
Common stock	1,448,000	1,011,550
Total liab. & equity	$4,789,240	$4,341,850

 

SyncTech I/S (in $ thousand): 

	FY 2055
Net sales	11,455,500
Cost of goods sold	(8,026,450)
Gross profits	3,429,050
Selling, general & admin. exp.	(1,836,400)
EBITDA	1,592,650
Depreciation & amortization	(785,250)
Interest expense	(46,195)
Income before tax	761,205
Income taxes	(157,725)
Net income	$603,480

 

SyncTech additional information:

            Number of common shares (weighted average): 308,515 thousand shares   

         
            Preferred dividends:                                                $85,000 thousand 

 

 

 

Use the information about SyncTech, Inc. provided above to answer the following. 

 

a. Compute the firm's ROCE for FY 2055 (*ignore the adjustment for interest expenses) and decompose it into three components (a.k.a. DuPont analysis).      

b. Suppose that the firm's assets were 100% financed through equity (i.e., no liability). What would the difference between ROA and ROCE be?        

Answer rating: 100% (QA)

a To compute ROCE we need to first calculate EBIT earnings before interest and taxes and average ope... View the full answer