discussion 1 228
Step 1: Read the articles. These articles contain examples of using DuPont formula to analyze ROE.
1) How Did Deltic Timber Corporation’s (DEL) 3.41% ROE Fare Against The Industry? â€“ By Liz Campbell Simply Wall St.
2) With A Recent ROE Of 3.33%, Can Glen Burnie Bancorp (GLBZ) Catch Up To Its Industry? – By Brent Freeman Simply Wall St.
3) What You Must Know About Continental Materials Corporation’s (CUO) Return on Equity- By Bernadette Hatcher Simply Wall St.
Step 2: You must use the company assigned for the project and one of its peer competitors.
For this discussion you will get financial information using www.morningstar.comwebsite.
Type the stock symbol in the search window. This is the window just below the title MORNINGSTAR on the top of the screen.
Once you have your company page, click on Key Ratios.
Click on Full Key Ratios Data .
ROE and it’s components for DuPont formula can be found under Profitability. Debt/equity ratio can be found under Key Ratios â€“ Financial Health.
To get the list of competitors now you need to click on Analysis – and click on Competitors.
You must answer the questions below:
- Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for the last three years for your company. You also may use debt/equity ratio in your analysis.
- Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for the last year for its major peer competitor. You also may use debt/equity ratio of peer competitor in your analysis.
- Has the company’s ROE changed over the last three years? What was the main factor that influenced this change?
- Compare the ratios of you company to the peer competitor. If the management of the company would like to improve their return on equity, what should the management of the company do?
- Reflection â€“ the students also should include a paragraph in the initial response in their own words reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace.