Can someone help me to perform a five-way analysis of return on equity (ROE) for exhibit 6?
Below is the exhibit that I got from the case study:
Exhibit 6 that I need help with :
Exhibit 3 INCOME STATEMENT (millions of $) Sales Cost of Goods Sold Gross Profit Selling and Administration Depreciation Operating Profit Interest Earnings Before Taxes Taxes Net Income 2000 2001 2002 2003 2004 2005 287.14 299.45 725.45 793.34 814.55 856.00 209.69 210.45 506.91 550.53 595.34 629.43 77.45 89.00 218.54 233.81 219.21 226.57 57.34 60.06 104.14 125.53 136.57 160.23 7.53 13.54 21.54 20.89 21.22 26.54 12.58 15.40 92.86 87.39 61.42 39.80 9.41 12.53 35.51 24.67 17.96 13.01 3.17 2.87 57.35 62.72 43.48 26.79 1.01 0.92 18.35 20.07 13.91 8.57 2.16 1.95 39.00 42.65 29.55 18.22 Exhibit 4 BALANCE SHEET (millions of $) Cash AR Inventory Total Current Assets Land, Plant and Equipment net Other Assets Total Assets 2000 2001 2002 2003 2004 2005 10.76 20.58 25.78 38.55 34.21 29.75 45.01 48.54 84.89 85.39 95.32 99.23 17.12 79.68 82.69 79.3 53.88 75.33 72.89 148.76 193.36 203.24 183.41 204.31 54.32 162 28 184.18 178.01 182.74 211.48 2.47 8.38 8.82 9.49 11.65 129.68 316.43 385.92 390.07 375.84 427.44 5.39 AP 53.77 90.73 112.15 109.98 129.04 189.84 Current Portion of LT Debt 2.88 18.09 18.77 14.32 8.56 6.22 Total Current Liabilities 56.65 108.82 130.92 124.28 137.6 190.00 Long-term Debt 52.82 185.45 193.84 161.98 104.88 79.8 Shareholders' Equity 20.21 22.16 61.16 103.81 133.36 151.58 Total Liabilities and Equities 129.68 316.43 385.92 390.07 375.64 427.44 Exhibit 5 INDUSTRY AVERAGES Current Ratio Cash Ratio Inventory Turnover in Days A/R Turnover in Days AJP Turnover in Days Cash Conversion Cycle Fixed Assets Tumover Total Assets Tumover Debt Ratio Times Interest Earned Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Assets Return on Equity 1.25 0.27 44.12 32.45 60.23 16.35 3.72 2.05 0.54 9.33 32.00% 14.00% 8.50% 17.46% 38.25% 2003 2004 2005 Ind. Av. 1.64 0.31 1.33 0.25 1.04 0.15 1.25 0.27 CALIFORNIA CHOPPERS RATIO TABLE 2000 2001 2002 Liquidity Current Ratio 1.29 1.37 1.48 Cash Ratio 0.19 0.19 0.20 Asset Management Inventory Turnover in Days 83.9 58.4 A/R Turnover in Days 57.01 33.57 A/P Turnover in Days 125.31 73.04 Cash Conversion Cycle 15.63 18.98 Fixed Assets Turnover 5.291 1.85 3.94 Total Asset Turnover 2.21 0.34 0.52 Long-term Debt Paying Debt Ratio 0.84 0.93 0.84 Times Interest Earned 1.34 1.23 2.621 Profitability Gross Margin 27% 30% 30% Operating Profit Margin 4.38% 5.14% 12.80% Net Profit Margin 0.75% 0.65% 5.38% ROA 0.53% 0.00 10.11% ROE 0.00% 0.00% 0.00% 52.8 39.17 72.44 19.57 4.46 0.51 40.8) 40.49 73.26 8.06 4.46 0.53 37.5 41.48 92.46 13.52 4.05 0.53 44.12 32.45 60.23 16.35 3.72 2.05 0.73 3.54 0.64 3.421 0.65 3.06 0.54 9.33 29% 11.02% 5.38% 10.93% 0.00% 27% 7.54% 3.63% 7.87% 0.00% 26% 4.65% 2.13% 4.26% 0.00% 32.00% 14.00% 8.50% 17.46% 38.25% ANALYSIS OF ROE 5-WAY EBIT/Sales EBT/EBIT NIEBT Total Asset Turnover Debt Ratio ROE 2001 2002 2003 2004 2005
