Analytics mindset

Implementing the DuPont Method

Part III: Apply appropriate data analytic techniques

You are now ready to analyze the data. Previously, you identified five questions that you thought would provide relevant insights of the data. Before answering those questions, answer the questions that are listed below. For each question:

$$ Identify the type of the analysis to perform

$$ Identify which data elements are needed to perform the analysis

$$ Create the analysis using Tableau

Required

Questions about industries

$1.$ Which industries for fiscal year $2015$ are the highest and lowest performing for each of the following performance indicators? For measuring performance, use the median industry performance to control for the potentially large effects of outliers. Compare your answers to what you predicted in Part I. What did you predict correctly and where were you incorrect? Why do you think you were incorrect for some industries?

Item Highest Lowest

Return on equity

Profit margin ratio

Asset turnover ratio

Financial leverage ratio

$2.$ Which industry has seen the greatest improvement in median ROE from $2013$ to $2015?$ What are the best explanations, based on the ratios in the DuPont Method, for why the ROE has improved in that industry?

$3.$ Assume you want to invest in one of the industries included in the dataset $($i$.$e$.,$ buy stock in all companies in one industry$).$ Which industries do you think will offer the highest and lowest return in $2016?$ Which industries will provide the safest and riskiest return in $2016?$ Does removing outliers change your opinion?

Questions about individual companies

$4.$ What companies have the best ROE within each industry for $2015?$ Sort the data so you can see the companies listed from highest to lowest ROE. What observations do you make about differences in ROE for the different companies?

$5.$ Companies that have negative profit margins but are increasing their asset turnover ratio are $$accelerating into a brick wall$($i$.$e$.,$ they are getting better at losing money$).$ What three companies in $2015$ are the worst in that they have a negative profit margin and the highest asset turnover ratio? Give the name of the company.

$6.$ Create a dashboard that allows you to evaluate how a company$$s ratios change between $2014$ and $2015.$ The dashboard should show the ratios for $2014$ and $2015,$ the percentage change from one year to the next, and the percentage change for the company$$s industry. Choose three different companies and discuss what you learn about the company based on these metrics.