Unformatted text preview: 3. Decompose Inditex’s return on equity in 2007 and 2008 using the alternative approach. What explains the difference between Inditex’s return on assets and its operating return on assets? 4. Analyze the underlying drivers of the change in Inditex’s return on equity. What explains the decrease in return on equity? (e.g. address issues of store productivity, cost control, pricing and leverage….) Exercise 2 Toledo Toy, a manufacturer of infants’ blocks, presented the following data in its last annual report. This trend analysis begins with the year of formation, 2007. Sales Cost of Sales Net Income Required: a. Using 2007 as the base year, perform a horizontal, common-size analysis. b. Comment on the results of the horizontal analysis....
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- Spring '08
- Generally Accepted Accounting Principles, Inditex, raditional Income Taxes, decomposition Comparative income, Operating Income NOPAT, Sales noncurrent assets