Questions :

You are the head of the strategic management department of a company that manufactures steel. You are in the process of updating the company's strategic growth plan. The level of competition in the industry has increased significantly and you expect the trend to continue. Your company must take into account the effect of the increased competition on its performance. Aluminium, Copper, Iron, Lead, and Mercury are other companies in the steel industry. Use the following information from these companies to assist you in making a presentation to the board.
Cost of equity (RE)			10%
Excerpt from income statement			Aluminium	Copper	Iron	Lead	Mercury
Sales						$68,679	$20,252	$56,620	$34,616	$20,414
EBIT						$5,287	$1,914	$4,262	$2,321	$2,653
Net income					$4,575	$1,381	$2,776	$1,411	$2,717
Excerpt from balance sheet				Aluminium	Copper	Iron	Lead	Mercury
Total assets					$85,297	$15,841	$73,768	$41,978	$32,192
Total debt					$44,442	$6,757	$29,461	$23,096	$22,706
Total equity					$40,855	$9,085	$44,307	$18,882	$9,486
Based on this information, answer the following questions in the corresponding answer tabs in this sheet.
Question 1
Use the following metrics (as given in this unit's interactive infographic) to calculate the performance of the steel industry:
1.	Economic income
2.	Asset turnover
3.	Leverage
4.	Profit margin
5.	Return on equity
Question 2
Calculate the median ROE for the steel industry and assess the level of competition compared to the automotive industry, whose median is 9%. Refer to the Unit 3 notes for a refresher on the median calculation.

Answer : Have prepared the answer please have a look and suggest

Answer # 1

Use the following metrics (as given in this unit's interactive infographic) to calculate the performance of the steel industry:
1.	Economic income
2.	Asset turnover
3.	Leverage
4.	Profit margin
5.	Return on equity
	Aluminium	Copper	Iron	Lead	Mercury
Economic income	489.50	472.12	-1655.00	-476.81	1768.53
Asset turnover	0.81	1.28	0.77	0.82	0.63
Leverage	1.09	0.74	0.66	1.22	2.39
Profit margin	6.7%	6.8%	4.9%	4.1%	13.3%
Return on equity	11.20%	15.20%	6.26%	7.47%	28.64%

Answer # 2

Calculate the median ROE for the steel industry and assess the level of competition compared to the automotive industry, whose median is 9%. Refer to the Unit 3 notes for a refresher on the median calculation.

[Start writing here: To find the median, first order the ROE from smallest to largest. Therefore we have: 6.27%, 7.47%, 11.20%, 15.20%, 28.64% So we could say that the median will be Aluminum's ROE or 11.20% When we talk about the level of competition, it highlights the number of companies competing within the industry. And the higher the number of competitors is, the lesser the income they share. With the given scenario, the Steel industry has 11.2% ROE while the Automotive industry has 9% ROE. We could then say that the competition in the Steel industry is much lesser than the competition in the Automotive Industry in terms of net income basis. Higher ROE means higher net income and higher net income means lesser competition.]