1. As per a November 2020 report, NeerajKanwar, the Vice-Chairman and MD of Apollo Tyres said, We are towards the end of our current capex cycle. Going forward, the focus would be on sweating the assets and de-leveraging the balance sheet. We expect the capex intensity to come down in the next few years, which, coupled with recovery in demand, should help us generate positive free cash flows and further de-leverage our balance sheet. Kanwar said the company was cognizant of the fact that capex in the past few years had been high and that coupled with current demand softness had impacted the return ratios. We are focussed on getting the return ratios back to a healthy level and expect this to happen over the next few years, he said.

Use the DuPont framework to illustrate how the company plans to get its ROE back to healthy levels. For this purpose, use the information given in the question to identify the sequence of actions/ events the company is planning and which financial ratios or metrics they will impact, thereby, finally charting their impact on the ROE ratio