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Perform Dupont Analysis for ABC Company and XYZ Company, using the information for 2017 below. Explain what Dupont Analysis is telling you about the performance

Perform Dupont Analysis for ABC Company and XYZ Company, using the information for 2017 below. Explain what Dupont Analysis is telling you about the performance of these two firms. Note you may not need to use all of the information included here.

Firm

Total Asset Turnover

Net Profit

Margin

Receivables

Turnover

Leverage Measure (TA/TE)

ABC

1.8

4%

4.1

2.3

XYZ

2.7

7%

3.2

1.5

a. Calculate return on equity for both firms. You may not need all information provided.

b. Is Dupont Analysis backward looking or forward looking?

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