In this assessment you will use the income statement and balance
sheet information identified below and evaluate the firm’s financial
condition based on three profitability ratios: a) Total Margin, b) Return on
Assets and c) Return on Equity. You will also conduct a DUPONT ANALYSIS
using the information on the financial statements. You will be
graded based on your understanding of the 3 ratios analyzed and the
DUPONT ANALYSIS, the accuracy of your calculations, the validity of you conclusions
and your ability to clearly communicate your analysis. To complete this
assignment, follow these steps.
Review Chapter 17 in
the Gapinski textbook and Chapter 14 in the Nowicki textbook.
Examine the Statement of Operations and Balance Sheet provided as part of
Problem 17.4 at the end of Chapter 17 in Gapenski textbook.
From this financial
information calculate the three profitability ratios: a) Total Margin, b)Return
on Assets and c) Return on equity and conduct a
Dupont Analysis based on the financial statement information above
Write a short paper in
the following format:
Cover page with your name, class/section and instructor’s name
For each ratio, in a
paragraph: define the ratio, explain what it measures, show your calculation
and explain what the ratio tells you about your organization’s health and any
limitations of using the ratio.
Explain the importance
of a Dupont Analysis
Write a conclusion
about your organization’s financial condition based on your ratio analysis. Use
Industry benchmarks provided in Problem 17.4 of Gapenski.
Describe and discuss
the use of operating indicators in additional to financial ratios in measuring