Question
For the firms in the popup window find the return on equity using the three components of the DuPont identity: operating efficiency, as measured by
For the firms in the popup window find the return on equity using the three components of the DuPont identity: operating efficiency, as measured by the profit margin (net income/sales); asset management efficiency, as measured by asset turnover (sales/total assets); and financial leverage, as measured by the equity multiplier (total assets/total equity).
First, find the equity of each company using the following equation.
Next, calculate the three components of the DuPont identity.
Last, use the three components of the DuPont identity to find the ROE.
Data Table Click on the following loon in order to past this table's content into a spreadsheet. Financial Information ($ in millions, 2013) Company Sales Net Income Total Assets Liabilities PepsiCo $66.482 $6,762 $77,344 $53,002 Coca-Cola $46,705 $8,513 $90,065 $56.730 McDonald's $28.152 $5,830 $36,579 $20,677 Print DoneStep by Step Solution
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