In week 3's course resources, there is a link to an article on DuPont analysis.DuPont analysis is a relatively quick and effective way to analyze the overall financial health of a firm.This week you will be using the 3-step DuPont model to analyze the financial health of a firm. Go the link that follows and study the 3-step DuPont model.http://www.aaii.com/computerizedinvesting/article/deconstructing-roe-dupont-analysis

In the link you see that the return on equity (ROE) can be broken down into a 3-step DuPont model of ROE = Net profit margin (NPM) x Asset turnover (AT) x Equity multiplier (EM).NPM is telling us how well the manager did at controlling expenses; AT is telling us how efficiently the assets are being used by the firm, and EM is telling us how reliant the firm is on debt financing; debt reliance increases financial leverage (magnifying ROE) but also increases financial risk.

Go to finance.yahoo.comand choose a company. Enter the company name in the search box on the top and click on "Search" near the top of page.Once you have the company overview page open, you will see a menu of specific information below the company name; click on "Financials".Open the firm's Income Statement and its Balance Sheet.You should see 3 years of data in almost all cases.If you do not, choose another firm.The dates of the statements will vary by company since companies may or may not have a fiscal year end of December 31.

Please compute your chosen firm's 3-step Dupont Model equation,reporting numerators and denominators of all 4 ratios (ROE, NPM, AT, and EM) for all 3 years reported.Discuss the economic meaning of the trends revealed over the 3-year period.To have a complete discussion, you should discuss trends in each the NPM, AT and EMand what those trends mean in economic terms.

https://www.boundless.com/finance/textbooks/boundless-finance-textbook/introduction-to-the-cost-of-capital-10/

https://www.boundless.com/finance/textbooks/boundless-finance-textbook/obtaining-capital-methods-of-long-term-financing-14/?

https://www.boundless.com/finance/textbooks/boundless-finance-textbook/overview-of-short-term-financing-19/?

https://www.score.org/resource/business-planning-financial-statements-template-gallery