Question
The following financial information is available for your use : Revenue: $130,500,000 (2012); $202,560,000 (2013). Net Income: $22,740,000 (2012); $44,563,000 (2013). Assets: $210,000,000 (2012); $206,700,000
The following financial information is available for your use
: Revenue: $130,500,000 (2012); $202,560,000 (2013).
Net Income: $22,740,000 (2012); $44,563,000 (2013).
Assets: $210,000,000 (2012); $206,700,000 (2013).
Shareholders' Equity: $146,500.000 (2012); $148,824,000 (2013)
. Market Value Per Stock Share: $23.15 (2012); $28.22 (2013).
Earnings Per Share: $2.87 (2012); $4.10 (2013).
Industry Average ROE: 22.5% (2012); 27.3% (2013)
. Industry Average Price/Earnings Ratio: 7.7 (2012); 8.2 (2013).
Compute and analyze the following: Compute the return on equity (DuPont Model) for 2012 and 2013 and show all intermediate calculations to arrive at the ROE figure.
Analyze the return on equity (DuPont Model) change from 2012 to 2013, comparing it with the industry average ROE given in the assignment.
In two paragraphs or less, write up your analysis discussing the positive and negative aspects of the company's performance. Compute the Price-earnings Ratio for 2012 and 2013 and show all your calculations. Analyze the Price-earnings Ratio change from 2012 to 2013, comparing it with the industry average Price-earnings Ratio for each year. In two paragraphs or less, write up your analysis discussing the positive and negative aspects of the company's Price-earnings performance. Combine your analyses of the ROE and Price-earnings Ratio into a single memo that will be sent to all senior management. In addition to your analysis of the changes from 2012 to 2013, outline your recommendations for the year 2014.
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