eng111_HW1_solution

eng111_HW1_solution - Profit margin = 0.25 Equity...

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HW1 solution Q1. Balance sheet and income statement are Skipped. Note: Because of rounding errors, students’ answers might be slightly different. Answers close to the solutions below are considered correct. Using data from other years is also correct, in which case the results are different. Amgen Current ratio= 2.11 Total asset turnover = 0.43 Profit margin = 0.21 Equity multiplier = 1.94 Return on equity = 0.18 DuPont identity: ROE =(0.21) * (0.43) *(1.94) = 0.18 Microsoft Current ratio=1.44 Total asset turnover =0.83 Profit margin =0.29 Equity multiplier =2.0 Return on equity =0.48 DuPont identity: ROE=0.29*0.83*2=0.48 Google Current ratio=8.4 Total asset turnover =0.65
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Unformatted text preview: Profit margin = 0.25 Equity multiplier = 1.11 Return on equity = 0.18 DuPont identity: ROE =0.25*0.65*1.11=0.18 Citigroup Current ratio = 37,202,000/24,383,000 = 1.53 Total asset turnover = 15,061,000/65,117,000 = 0.23 Profit margin = 4,373,000/15,061,000 = 0.29 Equity multiplier = 65,117,000/33,594,000 = 1.94 Return on equity = 4,373,000/33,594,000 = 0.13 DuPont identity: ROE=profit margin * asset turnover * equity multiplier=(0.29) * (0.23) * (1.94) = 0.13 General Motors Current ratio=0.86 Total asset turnover =1.21 Profit margin =-0.21 Equity multiplier =-4.01 Return on equity =1.02 DuPont identity: ROE=(-0.21)*1.21*(-4.01)=1.02...
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eng111_HW1_solution - Profit margin = 0.25 Equity...

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