Apply the DuPont model (which disaggregates the performance of managers into three componentsprofitability, asset utilization, and financial leverage) to analyze financial performance of Diamond during 20092011. Specifically, do the following:

(i) For fiscal years 2009, 2010, and 2011, compute ROA (return on assets) defined as after-tax operating income divided by average total assets and its decomposition into return on sales (after-tax operating income divided by sales), and asset turnover (sales divided by average total assets). What are the major reasons for the change in ROA over this period (20092011)? How have the recent acquisitions affected Diamonds profitability and ROA of Diamond?

(ii) For fiscal years 2009, 2010, and 2011, compute the ROCE (return on common stockholders equity) defined as net income to common stockholders divided by average stockholders equity and its decomposition into profit margin for ROCE (net income to common stockholders divided by sales), asset turnover (sales divided by average total assets), and capital structure leverage (average total assets divided by average stockholders equity).

(iii) While Diamonds ROA and ROCE both went down in 2011 compared to 2009, the relative reduction in the ROCE is much less. Why?

Income Statement Year Net Sales $ Less: Cost of goods sold $ Gross Margin $ Less: Operating expense $ Less: Interest expense $ Other expense Total expense $ Less: Taxes $ Net profit after tax $ 2011 965,922 $ 714,775 $ 251,147 $ 158,167 $ 23,840 $ $ 69,140 $ 18,929 $ 50,211 $ 2010 2009 2008 2007 2006 680,162 $570,940 $531,492 $522,585 $477,205 519,161 $435,344 $443,490 $443,945 $411,809 161,001 $135,596 $ 88,002 $ 78,640 $ 65,396 108,771 $ 89,756 $ 64,121 $ 66,025 $ 58,465 10,180 $ 6,255 $ 1,040 $ 1,291 $ 295 1,849 $ 898 $ 98 $ 310 40,201 $ 38,687 $ 22,841 $ 11,226 $ 6,326 13,990 $ 14,944 $ 8,085 $ 2,793 $ (1,010) 26,211 $ 23,743 $ 14,756 $ 8,433 $ 7,336 Income Statement Year Net Sales $ Less: Cost of goods sold $ Gross Margin $ Less: Operating expense $ Less: Interest expense $ Other expense Total expense $ Less: Taxes $ Net profit after tax $ 2011 965,922 $ 714,775 $ 251,147 $ 158,167 $ 23,840 $ $ 69,140 $ 18,929 $ 50,211 $ 2010 2009 2008 2007 2006 680,162 $570,940 $531,492 $522,585 $477,205 519,161 $435,344 $443,490 $443,945 $411,809 161,001 $135,596 $ 88,002 $ 78,640 $ 65,396 108,771 $ 89,756 $ 64,121 $ 66,025 $ 58,465 10,180 $ 6,255 $ 1,040 $ 1,291 $ 295 1,849 $ 898 $ 98 $ 310 40,201 $ 38,687 $ 22,841 $ 11,226 $ 6,326 13,990 $ 14,944 $ 8,085 $ 2,793 $ (1,010) 26,211 $ 23,743 $ 14,756 $ 8,433 $ 7,336