Project 2 Analysis - Anthony Marsala Shenghao Bi ACC201...

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Anthony Marsala Shenghao Bi ACC201 Sec.24 Project #2 Company Analysis Based on the computed ratios and analysis of cash flow, we recommend investing in EI du Pont de Nemours and Co in the long run. Right away we noticed that Dow Chemical received most of its cash inflow for 2009 from financing activities whereas Dupont relied more on its operating activities. Looking back at the past three years we recognized a trend of increased cash flow from financing for Dow and decreased cash flow from operations. Dupont, however, has shown an increase in its cash flow from operations. This could signify that Dow is becoming less profitable and relying more on equity. Reliance on equity isn’t necessarily a bad thing if that cash is being used to generate more revenue. However, looking at some of the tests of profitability for 2009, return on equity for Dupont was 23%, which makes them almost six times as successful at generating revenue from equity than Dow, at 4%. Dupont was also more successful in
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Project 2 Analysis - Anthony Marsala Shenghao Bi ACC201...

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