just need qu 3 part b done in less than 200 words

min is 150

1. a) Using the DuPont method, analyse the profitability of each of the two companies in 2015 as compared to 2016 from a shareholder's point of view. Based on your calculations, explain the main reason(s) for the change in the profitability for each company over the two years. Note: ensure that you analyse in this question, not just describe the ratio values. (3 marks) b) Comparingbothcompanies'profitabilityin2016,stateoneareathatmighthelpthemanage mentof each company in improving their profitability in 2017. Question a is complete qu b has to be done note that In questions 1-3, an analysis is required and not just a description of the ratio. That means you need to explain how the ratio changed over time and what are the main reason(s) for that change, and how that will impact your company's financial position. profitability ERM power limited ERM power limited Mercury NZ limited Mercury NZ limited Net profit/Sales Profitability for 2015 Profitability for 2016 Profitability for 2015 Profitability for 2016 101,367,000.00/2,418,546,000.00 46,348,000.00/2,802,828,000.00 128,386,754.00/1,485,744,643.00 158,261,035.00/1,510,153,494.00 4.1913 % 1.6536 % 8.6412 % 10.4797 % A ) Profitability can be measured by dividing net profit over the sales. For ERM power limited company can be determined that the profitability for 2015 was 4.1913% and for 2016 was1.6536% by comparing this ratios it can be determined that the firm profitability goes down by 2.5377%. From the firm financial data reports, the reason for this dropping in the profitability over the year can be because of the operating expenses. For 2015 the operating expenses was 2,232,411,000.00 comparing this for 2016, the operating expenses was 2,686,179,000.00 and this raise in operating expenses over the year affect the net profit for 2016. Furthermore, it can be mentioned that amortisation went up in 2016 compared by 2015 by $6,317,000 and all this affect the net profit which affect the profitability from 2015 to 2016. On the other hand, for Mercury NZ limited the profitability for 2015 was 8.6412% comparing with 2016 was 10.4797%. Moreover, this raise in the profitability for the firm can be because of the company made better sales in 2016 comparing with 2015 as well as the company reduce the operating expenses in 2016