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please answer all parts 9. An analysis of company performance using Dupont analysis A shear of papers in her hand, your friend and colleague, Chloe,
please answer all parts
9. An analysis of company performance using Dupont analysis A shear of papers in her hand, your friend and colleague, Chloe, steps into your office and asked the following. CHLot: Do you have 10 or 15 minukes that you can spare? You: Sure, tive got a meoting in an houk, but 1 dont want to start something new and then be interrupted by the meeting, so how can1 help? CHLOE: tve been reviewing the company's fnancial stotemonts and looking for ways to improve our performance, in general, and the company's return on equity, or Roc, in particular. Eric, my new team leader, suggested that I start by using a Dupont analysis, and T'd like to run my numbers and conclusions by you to see whether I've missed anything. Here are the balance sheet and income statement data that Eric gave me, and here are my notes with my calculations. Could you start by making sure that my numbers are correct? You: Give me a minute to look at these finencial statements and to remember what I know about the Dupont analyals. If 1 remember correctly, the DuPont equation breaks down our RoE into three component ratios: the the total asset tumover ratio, and the And, accordine to my understanding of the Dupont equation and its caleulation of ROE, the three ratios provide insights into the company's , effectiveness in using the company's assets, and Now, Iet's see your notes with your ratios, and then we can talk about possible strategies that will improve the ratios. It'm going to check the box to the side of your calculated value if your calculation is correct and leave it unchecked if your calculation is incorrect. Hydra Cosmetics Inc. DuPont Analysis Hydra Cosmetics Inc. DuPont Analysis CHLOE: OK, it looks like I've got a couple of incorrect values, so shaw me your calculations, and then we can talk strategies for improvement. You: ive just made rough calculations, so lat me complete this table by inputting the components of each ratio and its value: Do not round intermedate caiculations and round your final answers up to two decimats. Hydra Cosmetics Inc, DuPont Analysis Do ook roond intermediate calculotions and round your finat answers up to two decimals. Hydra Cosmetics Inc. DuPont Analysis CHLOF, 1 see what I did wrong in my computations. Thanks for reviowing these calculations with me. You saved me from a lot of embarrassment! Eric would have been very disappointed in me if t had showed him my original work. So, now let's switch topics and identify general strategies that couid be used to positively affect Hydra's ROE. voU, OK, so given your konowiedge of the compenent ratios used in the Dupont equation, which of the foefowing stratenies thosild CMLOE: I see what 1 did wrong in my computations. Thanks for reviewing these calculations with me. You saved me from a lot of embarrassmentl Eric would have been very disappointed in me If I had showed him my original work. So, now let's switch topics and identify generat strategies that could be used to positively affect Hydra's ROE. YOU: OK, so given your knowledge of the component ratios used in the Dupont equation, which of the following strategies should improve the company's ROE? Check all that apply. Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin. Increase the interest rate of its notes payable or long-term debt obligations because it will reduce the company's net proft margin. Use more debt financing in its capital structure and increase the equity multipliec. Use more equity financing in its capital structure, which will increase the equity multiplier. CHLOE: I think I understand now. Thaniks for taking the time to go over this with me, and let me know when t can retum the favor. ruU: UK, so given your knowieoge of the component ratios used in the vuront equation, which or the roliowing strategies shoua improve the company's ROE? Check all that apply. Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net proft margin. Increase the interest rate on its notes payable or long-term debt obligations because it will reduce the company's net profit margin. Use more debt financing in its capital structure and increase the equity multiplier. Use more equity financing in its capital structure, which will increase the equity multiplier. CHLOE: 1 think I understand now. Thanks for taking the time to go over this with me, and let me know when I can return the fovor 9. An analysis of company performance using Dupont analysis A shear of papers in her hand, your friend and colleague, Chloe, steps into your office and asked the following. CHLot: Do you have 10 or 15 minukes that you can spare? You: Sure, tive got a meoting in an houk, but 1 dont want to start something new and then be interrupted by the meeting, so how can1 help? CHLOE: tve been reviewing the company's fnancial stotemonts and looking for ways to improve our performance, in general, and the company's return on equity, or Roc, in particular. Eric, my new team leader, suggested that I start by using a Dupont analysis, and T'd like to run my numbers and conclusions by you to see whether I've missed anything. Here are the balance sheet and income statement data that Eric gave me, and here are my notes with my calculations. Could you start by making sure that my numbers are correct? You: Give me a minute to look at these finencial statements and to remember what I know about the Dupont analyals. If 1 remember correctly, the DuPont equation breaks down our RoE into three component ratios: the the total asset tumover ratio, and the And, accordine to my understanding of the Dupont equation and its caleulation of ROE, the three ratios provide insights into the company's , effectiveness in using the company's assets, and Now, Iet's see your notes with your ratios, and then we can talk about possible strategies that will improve the ratios. It'm going to check the box to the side of your calculated value if your calculation is correct and leave it unchecked if your calculation is incorrect. Hydra Cosmetics Inc. DuPont Analysis Hydra Cosmetics Inc. DuPont Analysis CHLOE: OK, it looks like I've got a couple of incorrect values, so shaw me your calculations, and then we can talk strategies for improvement. You: ive just made rough calculations, so lat me complete this table by inputting the components of each ratio and its value: Do not round intermedate caiculations and round your final answers up to two decimats. Hydra Cosmetics Inc, DuPont Analysis Do ook roond intermediate calculotions and round your finat answers up to two decimals. Hydra Cosmetics Inc. DuPont Analysis CHLOF, 1 see what I did wrong in my computations. Thanks for reviowing these calculations with me. You saved me from a lot of embarrassment! Eric would have been very disappointed in me if t had showed him my original work. So, now let's switch topics and identify general strategies that couid be used to positively affect Hydra's ROE. voU, OK, so given your konowiedge of the compenent ratios used in the Dupont equation, which of the foefowing stratenies thosild CMLOE: I see what 1 did wrong in my computations. Thanks for reviewing these calculations with me. You saved me from a lot of embarrassmentl Eric would have been very disappointed in me If I had showed him my original work. So, now let's switch topics and identify generat strategies that could be used to positively affect Hydra's ROE. YOU: OK, so given your knowledge of the component ratios used in the Dupont equation, which of the following strategies should improve the company's ROE? Check all that apply. Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net profit margin. Increase the interest rate of its notes payable or long-term debt obligations because it will reduce the company's net proft margin. Use more debt financing in its capital structure and increase the equity multipliec. Use more equity financing in its capital structure, which will increase the equity multiplier. CHLOE: I think I understand now. Thaniks for taking the time to go over this with me, and let me know when t can retum the favor. ruU: UK, so given your knowieoge of the component ratios used in the vuront equation, which or the roliowing strategies shoua improve the company's ROE? Check all that apply. Reduce the company's operating expenses, its cost of goods sold, and/or the interest rate on its borrowed funds because this will increase the company's net proft margin. Increase the interest rate on its notes payable or long-term debt obligations because it will reduce the company's net profit margin. Use more debt financing in its capital structure and increase the equity multiplier. Use more equity financing in its capital structure, which will increase the equity multiplier. CHLOE: 1 think I understand now. Thanks for taking the time to go over this with me, and let me know when I can return the fovor Step by Step Solution
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