SMG AC 221 Study Guide - Final Guide: Operating Lease, Asset, Deferred Tax
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** PM, AT, ROA, FL, and ROE accounting question. Thanks for the help!
| Summary income statements and balance sheets are presented for the three largest companies in the chemical industry for fiscal year 2001 (in millions). For additional information, their Web sites (and ticker symbols) are www.dupont.com (DD), www.dow.com (DOW), and www.ppg.com (PPG). | |||
| Income Statement | |||
| DuPont | Dow | PPG | |
| Revenues | $24,726 | $27,805 | $8,169 |
| COGS | 16,727 | 22,015 | 5,137 |
| Gross Profit | 7,999 | 5,790 | 3,032 |
| SG&A Expenses | 4,513 | 2,807 | 1,764 |
| Net Income | 4,339 | (385) | 387 |
| Balance Sheet | |||
| DuPont | Dow | PPG | |
| Cash & Market Securities | $5,763 | $220 | $108 |
| Receivables, net | 3,903 | 5,098 | 1,416 |
| Inventories | 4,215 | 4,440 | 904 |
| Total Current Assets | 14,801 | 10,308 | 2,703 |
| Fixed Assets, net | 13,287 | 13,579 | 2,752 |
| Total Assets | 40,319 | 35,515 | 8,452 |
| Total Current Liabilities | 8,067 | 8,125 | 1,955 |
| Total Liabilities | 25,867 | 25,522 | 5,372 |
| Total Equity | 14,452 | 9,993 | 3,080 |
| The following additional information is provided for fiscal year 2000 (in millions): | |||
| DuPont | Dow | PPG | |
| Inventory | $4,658 | $3,463 | $1,121 |
| Receivables, net | 4,552 | 5,385 | 1,563 |
| Working Capital | 2,401 | 1,387 | 550 |
| Fixed Assets, net | 13,287 | 13,579 | 2,752 |
| Total Assets | 39,426 | 27,645 | 9,125 |
| Total Equity | 13,299 | 9,686 | 3,097 |
** Please fill out the below table. Also please show work/formulas used below the table if you are able. Thanks again!
| (4) Given the information presented on Sheet 1, calculate the DuPont Model for the three chemical companies for fiscal year 2001. Show calculations following the table. Assume all three companies had the same total common equity as total equity. | |||
| DuPont | Dow | PPG | |
| Profit Margin (PM) | |||
| Asset Turnover (AT) | |||
| Return on Assets (ROA) | |||
| Financial Leverage (FL) | |||
| Return on Equity (ROE) | |||
my company is target. Target competitor are Walmart, Amazon,Costco.
e.) How does your company stack up against its competiton.(graph/charts) (1-2 pages)
(1). Is company attractive in an attractive industry
(2.) what metrics superior companies for industry.
3.) analyze your company ranks in the industry using dupontanalysis and industry specififc ratios.
f.) state your investment thesis your investment philosophy
Does your company pass the your 10 minute test(graph/charts)
A.) Sustainable economic moat ? (your test) profitability? yourcompany ( Pass / Fail) Explain
B.) Growth? Stable? Dividends? (your test) your company (Pass /Fail) Explain
C.) Financial Health? Financial Risk your test your company(pass/ fail) explain
D.) Quality of Income? your test your company (pass/fail)explain
e.) good value? Buy now? your test your company (pass/fail)explain
This stock appears to be trading (below / about / over itaverage price.
g.) investment decisions
overall, this company is long term ( buy/ review again at lowerprice / bust?
Why? Give 5 good reason
1.
2.
3.
4.
5.
| $ in Millions | 1/30/2011 | 1/29/2012 | 2/3/2013 | 2/2/2014 | 2/1/2015 |
| PROFITABILITY Ratios | Are we generating enough returns on revenuesand investments? | ||||
| Gross Profit Margin | 31% | 31% | 30% | 29% | 30% |
| Net ProfitMargin, also known as Return on Sales (ROS) | 4% | 4% | 3% | -2% | 5% |
| Return on Assets (ROA) | 7% | 6% | 4% | -4% | 8% |
| Earnings per Share (EPS) | $4.31 | $4.57 | $3.10 | -$2.58 | $5.25 |
| Quality of Earnings ratio | -1.86 | -1.78 | -3.31 | -2.71 | 1.74 |
Investment Ratios
| INVESTMENT Ratios | How do weappear to our shareholders? | ||||
| Dividends per share | $ (1.10) | $ (1.32) | $ (1.58) | $ (1.90) | $ (2.13) |
| Market Value per share | $ 59.00 | $ 56.00 | $ 54.00 | $ 53.00 | $ 53.00 |
| Dividend Yield | -1.87% | -2.37% | -2.93% | -3.59% | -4.01% |
| Price-to-Earnings (P/E) ratio | -53.49 | -42.27 | -34.14 | -27.84 | -24.91 |
| Price-to-Sales (P/S) ratio | 38.09 | 37.00 | 35.44 | 33.69 | 34.98 |
| Price-to-Book (P/B) ratio | 22.00 | 23.64 | 25.13 | 25.56 | 25.57 |
| DuPont Analysis of ROE = ROS xAsset turnover = ROA x Financial LEVerage = ROE | |||||
| Return on Sales(ROS), also known as Net Profit Margin | 4.19% | 4.09% | 2.77% | -2.25% | 4.56% |
| Asset Turnover | 1.60 | 1.57 | 1.48 | 1.63 | 1.79 |
| Return on Assets (ROA) | 6.70% | 6.43% | 4.09% | -3.67% | 8.17% |
| Financial LEVerage | 2.82 | 2.95 | 2.91 | 2.74 | 2.94 |
| Return on Equity (ROE) | 18.91% | 18.96% | 11.90% | -10.08% | 24.03% |
| Year-End | 2/1/2015 | 1/30/2015 | 1/31/2015 | competitors | Year-End | ||
| $ in Millions | Target | Walmart | Costco | Amazon | $ in Millions | ||
| Assets | $ 41,172 | $ 203,490 | $ 35,451 | $ 64,747 | Assets | ||
| Liabilities | $ 27,175 | $ 122,096 | $ 24,603 | $ 51,363 | Liabilities | ||
| SEquity | $ 13,997 | $ 81,394 | $ 10,848 | $ 13,384 | SEquity | ||
| Revenue | $ 73,785 | $ 485,651 | $ 27,220 | $ 107,006 | Revenue | ||
| Net Income | $ 3,363 | $ 16,363 | $ 480,000 | $ 596 | Net Income | ||
| Industry Average | |||||||
| ROS | 4.56% | 3.37% | 1763.41% | 0.56% | #DIV/0! | ROS | |
| Asset Turnover | 1.7921 | 2.3866 | 0.7678 | 1.6527 | 1.7921 | Asset Turnover | |
| ROA | 8.17% | 8.04% | 13.54 | 0.92% | 8.17% | ROA | |
| Financial LEVerage | 2.94 | 2.50 | 3.27 | 4.84 | 2.9415 | Financial LEVerage | |
| ROE | 24.03% | 20.10% | 4424.78% | 4.45% | 24.03% | ROE |
