Use the following information to answer the questions that follow.

a. Use the DuPont system to compare the two heavy metal companies shown above (HMM and MS) during 2009. 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.?
c. Compare the leverage levels between the industries. Which industry receives a greater contribution from return on total assets? Which industry receives a greater contribution from the financial leverage as measured by the assets-to-equity ratio?
d. Can you make a meaningful DuPont comparison across industries? Why or why not?

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Income Stateiments For the Year Ended December 31, 2009 Heavy Metal Metallic Stamping Inc. (MS) S50,000,000 40,000,000 S10,000,000 High-Tech Software Co (HTS) Manufactuing (HMM) $75,000,000 65.000,000 S10,000,000 3.000.000 S 7,000,000 2,800,000 S 4,200,000 Sales Operating expenses Operating profit - Interest expenses Earnings before taxes $100,000,000 60,000.000 S 40,000,000 0 S 40,000,000 16.000.000 24,000,000 3.000.000 S 7,000,000 2,800,000 $4,200,000 -1 axes Net income Balance Sheet As of Deceinber 31, 2009 Heavy Metal Manufactring Metallic Higlh-Tech Stamping Inc Software Co (HMM) (MS) S 5,000,000 75.000.000 $80,000,000 $10,000,000 40,000.000 S50,000,000 $10,000,000 20,000,000 530.000.000 (HTS) Current assets Net fixed assets Total assets Current liabilities Long-term debt Total liabilities Common stock Retained earnings Total common equity Total liabilities and S 10,000,000 90.000.000 $100,000,000 S 20,000,000 40,000,000 S 60,000,000 S 15,000,000 25,000,000 40,000,000 S 20,000,000 80,000.000 $100,000,000 S 10,000,000 0 S 10,000,000 S 25,000,000 65,000,000 S 90.000.000 common equity $100,000.000 $80,000,000 $100,000,000