3 debt zach industries long term debt position has

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International Financial Management
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Chapter 17 / Exercise 16
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3. Debt: Zach Industries long-term debt position has decreased since 2014 and is below average. 4. Profitability: Zach Industries gross profit margin is below its industry average due to the high cost of goods so 5. Market: Zach Industries increase in their market price relative to their book value, where per share indicates
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International Financial Management
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Chapter 17 / Exercise 16
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The firm was not be able to satisfy short-term obligations as they are due, which is a major problem. nover has also decreased for the period under review and is below industry average. The inventory was not so old. The firm has a superior net profit margin as to average and the firm has lower than average operating exp that the firm’s performance has been explained as more positive in 2006 than in 2005 , with a price of $1.30 fo
old. penses. The firm also has a superior return on investment and return on equity as to the industry where it show or every $1.00 of book value of Zach Industry stock.
ws an upward progress.
DuPont System of Analysis Johnson 2013 ROE = 0.059*2.11*1.75 ROE = 0.2179 ROE = 21.79% 2014 ROE = 0.058*2.18*1.75 ROE = 0.2213 ROE = 22.13% 2015 a) DuPont sytem of analysis examines the return on equity (ROE) analyzing profit margin, total asset turnover, and financial leverage ROE = Profit Margin x Total Asset Turnover x Leverage Factor ROE = Profit Margin x Total Asset Turnover x Leverage Factor
ROE = 0.049*2.34*1.85 ROE = 0.2121 ROE = 21.21% Industry Average 2013 ROE = 0.054*2.05*1.67 ROE = 0.1849 ROE = 18.49% 2014 ROE = 0.047*2.13*1.69 ROE = 0.1692 ROE = 16.92% 2015 ROE = Profit Margin x Total Asset Turnover x Leverage Factor ROE = Profit Margin x Total Asset Turnover x Leverage Factor ROE = Profit Margin x Total Asset Turnover x Leverage Factor ROE = Profit Margin x Total Asset Turnover x Leverage Factor
ROE = 0.041*2.15*1.64 ROE = 0.1446 ROE = 14.46% b) Johnson has perform better than Industry over the 3 year in compare to Industry , Individually It has been decreased from Year 2014 to 2015 c) Johnson Require to increase Net Profit Margin area where the company permofmance would increase and it lead to increase in ROE
P3–26 DuPont system of analysis Use the following ratio information for Johnson International and the industry averages for Johnson’s line of business to: a. Construct the DuPont system of analysis for both Johnson and the industry. b. Evaluate Johnson (and the industry) over the 3-year period. c. Indicate in which areas Johnson requires further analysis. Why?

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