Question 1 [15 marks) High Tech Software Ca(HIS R1mm RECO00m ROC00000 stes Queron Emerses Qorone Profit Interest ENSES Eames before takes Tones (400 Net Income Statement of Comprehensivelname asof December 31, 2015 Heavy Metal Manufacturing (HMM Metathc/stampingirc ( R7500000 R RADOM ROCIDAD R R30000 R3000000 R700D R700 R28000 R2800m R4200m R42000 RO RID R 160mm R210000 Statement of Ananda Positions of December 31, 2015 Heavy Metal Manufactung (HMM M allic/stamping Inc (M@ Cast Sets ROMTOTD RSODUIT Net Rod Assets Room RTSATID THA RITO RHOOD amerables ROXTOOD Rio long termdett Rumam ROAD Total l libres REDO RSDC0000 Conrron stock R15amo R 1000 Rendernes R250DCD R2000 Tot communequity R40.000m REOTUD Total liablites and contronegal R100 cm R8000m HighTech Software Ca(HS Roma RIOT.700 ROAD000 Rapa RO R200000 R25000 RECIDCO ROOT RIDOT Use the DuPont system to compare the two heavy metal companies shown above (HHM and MS) during 2015 a. Which of the two has a higher return on common equity? What is the cause of the difference between the two? b Calculate the return on common equity of the software company HTS Why is this value so different from those of the heavy metal companies calculated in part (a)? (2) c Compare the leverage levels between the industries Which industry receives a greater contribution from the financial leverage as measured by assets-to-equity (AVE) ratio? (4) d Can you make a meaningful DuPont comparison across industries? Why or why not? (2) Question 1 [15 marks) High Tech Software Ca(HIS R1mm RECO00m ROC00000 stes Queron Emerses Qorone Profit Interest ENSES Eames before takes Tones (400 Net Income Statement of Comprehensivelname asof December 31, 2015 Heavy Metal Manufacturing (HMM Metathc/stampingirc ( R7500000 R RADOM ROCIDAD R R30000 R3000000 R700D R700 R28000 R2800m R4200m R42000 RO RID R 160mm R210000 Statement of Ananda Positions of December 31, 2015 Heavy Metal Manufactung (HMM M allic/stamping Inc (M@ Cast Sets ROMTOTD RSODUIT Net Rod Assets Room RTSATID THA RITO RHOOD amerables ROXTOOD Rio long termdett Rumam ROAD Total l libres REDO RSDC0000 Conrron stock R15amo R 1000 Rendernes R250DCD R2000 Tot communequity R40.000m REOTUD Total liablites and contronegal R100 cm R8000m HighTech Software Ca(HS Roma RIOT.700 ROAD000 Rapa RO R200000 R25000 RECIDCO ROOT RIDOT Use the DuPont system to compare the two heavy metal companies shown above (HHM and MS) during 2015 a. Which of the two has a higher return on common equity? What is the cause of the difference between the two? b Calculate the return on common equity of the software company HTS Why is this value so different from those of the heavy metal companies calculated in part (a)? (2) c Compare the leverage levels between the industries Which industry receives a greater contribution from the financial leverage as measured by assets-to-equity (AVE) ratio? (4) d Can you make a meaningful DuPont comparison across industries? Why or why not? (2)