Question
A) Following information is from the past financial statements of BHP Group Limited (BHP). Income Statement ($million) Item 2019 2020 2021 Sales 63711.68 63686.43 81573.56
A) Following information is from the past financial statements of BHP Group Limited (BHP).
Income Statement ($million) | |||
Item | 2019 | 2020 | 2021 |
Sales | 63711.68 | 63686.43 | 81573.56 |
Operating Expenses | -30690.15 | -31650.88 | -32092.31 |
EBITDA | 33021.53 | 32035.55 | 49481.25 |
Depreciation and Amortisation | -8311.71 | -8905.73 | -9076.88 |
EBIT | 24709.82 | 23129.83 | 40404.36 |
Net Interest Expense | -1517.18 | -1327.41 | -1735.83 |
Profit Before Tax | 23192.64 | 21802.42 | 38668.53 |
Tax Expense | -8229.00 | -7307.30 | -13065.97 |
Net Profit | 14963.64 | 14495.12 | 25602.55 |
Balance Sheet ($million) | |||
Item | 2019 | 2020 | 2021 |
Total Current Assets | 33328.10 | 35505.45 | 41608.36 |
Total Non-Current Assets | 110491.94 | 109382.81 | 96533.60 |
Total Assets | 143820.05 | 144888.27 | 138141.97 |
Total Current Liabilities | 17594.47 | 21818.30 | 24559.44 |
Total Non-Current Liabilities | 52328.53 | 49107.48 | 42794.31 |
Total Liabilities | 69923.00 | 70925.78 | 67353.75 |
Total Equity | 73897.05 | 73962.49 | 70788.21 |
Total Liabilities & Equities | 143820.05 | 144888.27 | 138141.97
|
i) Based on the information provided in the table above calculate Return on Equity (ROE) of BHP for 2020 and 2021.
ii) Use Dupont analysis to decompose BHPs ROE for 2020 and 2021.
iii) Based on the various components of ROE calculated in the Dupont analysis above, discuss why BHPs ROE has changed from 2020 to 2021.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started