Question
TJ Inc. and Mall Inc.operate in the same industry. A). Use the financials below to compare the two firmsFocus on the three levers of performance
TJ Inc. and Mall Inc.operate in the same industry.
A). Use the financials below to compare the two firmsFocus on the three levers of performance that affect return on equity (ROE), comparing and contrasting these three DuPont components of ROE.
B.) Do you think the difference between these firms can be attributed to weak management in one of the firms; or could it be that the two simply have different competitive strategies? Explain briefly.
| TJ Inc | In$000's | Mall Inc | In$000's | ||||||||||
| 200X | 200X | ||||||||||||
| ||||||||||||||
| Revenue | 59,490,000 | Revenue | 348,650,000 | ||||||||||
| COGS | 39,399,000 | COGS | 264,152,000 | ||||||||||
| Gross Profit | 20,091,000 | Gross Profit | 84,498,000 | ||||||||||
| ||||||||||||||
| Operating Exp | 15022000 | Operating Exp | 64001000 | ||||||||||
| Operating Profits | 5,069,000 | Operating Profits | 20,497,000 | ||||||||||
| ||||||||||||||
| Interest Expense | 597,000 | Interest Expense | 1,809,000 | ||||||||||
| EBT | 4,472,000 | EBT | 18,688,000 | ||||||||||
| ||||||||||||||
| Tax | 1,710,000 | Tax | 6,365,000 | ||||||||||
| Net Income | 2,762,000 | Net Income | 12,323,000 | ||||||||||
| ||||||||||||||
| ||||||||||||||
| Assets | 31-Dec-0X | Assets | 31-Dec-0X | ||||||||||
| Cash | 813,000 | Cash | 7,373,000 | ||||||||||
| A/R | 6,194,000 | A/R | 2,840,000 | ||||||||||
| Inventory | 6,254,000 | Inventory | 33,685,000 | ||||||||||
| Current Assets | 13,261,000 | Current Assets | 43,898,000 | ||||||||||
| ||||||||||||||
| Prop, Plant & Equip | 21,431,000 | Prop, Plant & Equip | 88,440,000 | ||||||||||
| ||||||||||||||
| Total Assets | 34,692,000 | Total Assets | 132,338,000 | ||||||||||
| ||||||||||||||
| Liabilities & Equity | Liabilities & Equity | ||||||||||||
| A/P | 9,755,000 | A/P | 43,471,000 | ||||||||||
| ST Portion of LTD | 1,362,000 | ST Portion of LTD | 8,283,000 | ||||||||||
| Current Liabilities | 11,117,000 | Current Liabilities | 51,754,000 | ||||||||||
| ||||||||||||||
| LT Debt | 10,599,000 | LT Debt | 30,735,000 | ||||||||||
| Total Liabilities | 21,716,000 | Total Liabilities | 82,489,000 | ||||||||||
| ||||||||||||||
| Total Equity | 12,976,000 | Total Equity | 49,849,000 | ||||||||||
| ||||||||||||||
Total L & Equity | 34,692,000 | Total L & Equity | 132,338,000 |
| ||||||||||
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