EnergyCo is a US utility company that distributes electricity to over $1,000,000$ residential and

industrial customers and is responsible for electricity generation and the grid on which the

electricity flows. EnergyCo uses a mix of technologies including hydroelectric, wind, nuclear

power, coal, oil and natural gas, however the predominant base$-$load power is coal provided by

an inefficient coal plant that needs to be decommissioned in the next $10$ years.

Capacity by Energy Source

Coal

$69\%$

Gas

$14\%$

Oil

$6\%$ Nuclear

$5\%$

Hyroelectric

$5\%$

Renewables

$1\%$

Over the last $20$ years, electricity consumption has increased by $50\%$ while residential rates

have decreased by $13\%.$ EnergyCo has budgeted more than $$100$ million over the next $5$ years

on programs to reduce the growth rate of electricity consumption, however, efficiency and

conservation efforts cannot offset the base$-$load capacity when the old coal$-$fired plant is

decommissioned. EnergyCo has decided to build a new power plant to align with the

decommissioning of the coal plant. Managers have some flexibility in the capacity for the new

plant due to the buying and selling of modest amount of power. In fact, in the last year, $40\%$ of

earnings were due to wholesale power. The decision now exists as to which type of technology

to pursue for the additional capacity at the new power plant.

EnergyCo$$s financial information is summarized in the table below: $($in millions of US $s$)$

In the past, cost minimization and reliability were the primary criteria when deciding how to

increase capacity. However today, EnergyCo needed to also consider the rising fuel and

transportation costs; the need for fuel diversity to mitigate risks and align with regulatory and

legislative mandates; concerns for climate and environmental factors, and the benefits of

developing renewable energy sources. EnergyCo cannot increase rates without permission from

authorities. The rates charged for electricity were established in a regulatory process that took up

to $18$ months for approval. The rates that were agreed to were predominantly based on historical

data of costs plus an allowable return on investment by regulators.

Question:

$1)$ How has EnergyCo been performing financially? What trends have you seen over the

last $5$ years? Determine the profit margin, asset turnover, APT, ART, INVT, PPET and

C$2$C$,$ ROE, ROA, ROFL and summarize these measures in a table. How might these

measures relate back to current supply chain strategies?$\backslash$table$[[,2022,2021,2020,2019,2018],[$Net Sales,$8,602\mathrm{.}0,7,843\mathrm{.}0,7,{725\mathrm{.}0}^2,5854,5253],[$Cost of Goods Sold,$3,957\mathrm{.}0,3,529\mathrm{.}0,3,399\mathrm{.}0,2342,1944],[$Gross Profit,$4,645\mathrm{.}0,4,314\mathrm{.}0,4,326\mathrm{.}0,3,512\mathrm{.}0,3,309\mathrm{.}0$