6.2 Lecture_12_Thursday_20_August

5 bep vs industry average 6 2009 bep 191 2008 2007 241

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Unformatted text preview: eholders etc) But it is averaged out over all types of investor. 5 BEP vs. Industry Average? 6 2009 BEP 19.1% 2008 2007 -24.1% 14.2% Ind. • • • BEP removes effect of taxes and financial leverage. Useful for comparison. Projected to be ___________________ Room for ________________________ 7 Return on Assets: ROA NPAT ROA = = TA NPAT Sales × Sales TA 8 Calculate Return on Assets 9 NPAT ROE = Equity = NPAT Sales × Sales Equity A very useful expanded form of ROE is called the Du Pont Equation: NPAT Sales TA ROE = × × TA E Sales 10 10 ROE Solution: 2009 ROA ROE Both 2008 2007 Ind. -18.1% 6.0% 9.1% -391.4% 13.3% 18.2% 11 11 ____________________________. Du Pont System • shows relationship between ROE and NP margin asset turnover financial leverage firm can improve ROE by raising NP margin on sales extracting more sales from existing assets replacing equity with debt The Du Pont System is just ____________ ___________________________________ 12 12 • • Profi...
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This note was uploaded on 12/23/2009 for the course BCOM FINC 202 taught by Professor Warwickanderson during the Spring '09 term at Canterbury.

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