DuPont identity.??For the firms in the popup? window, find the return on equity using the three...

70.2K

Verified Solution

Question

Finance

DuPont identity.??For the firms in the popup? window, find thereturn on equity using the three components of the DuPont?identity: operating? efficiency, as measured by the profit margin?(net income/sales); asset management? efficiency, as measured byasset turnover? (sales/total assets); and financial? leverage, asmeasured by the equity multiplier? (total assets/total?equity).

Financial Information? ($ in? millions, 2013)

??Company

Sales

Net Income

Total Assets

Liabilities

??PepsiCo

?$66,314

?$6,652

?$77,435

?$53,028

? Coca-Cola

?$46,853

?$8,551

?$990,016

?$56,756

? McDonald's

?$28,041

?$5,772

?$36,650

?$20,551

1) find the equity of each company. 4 decimals

2) calculate the three components of the DuPont identity 4decimals

a) profit margin ratio b) asset turnover ratio c) equitymultiplier (for all 3)

3) Find ROE for all 3, 4 decimals.

4) Which company is the most operationally efficient, managementefficient, and best for the shareholders?

Answer & Explanation Solved by verified expert
3.6 Ratings (646 Votes)
1 Equity of Pepsi Co Total assets Total Liabilities 77435 53028 24407 Equity of Cocal Cola 990016 56756 933260 Equity of McDonaldss 36650 20551 16099 2 Profit Margin of Pepsis Co Net incomeSales 665266314 01003    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

DuPont identity.??For the firms in the popup? window, find thereturn on equity using the three components of the DuPont?identity: operating? efficiency, as measured by the profit margin?(net income/sales); asset management? efficiency, as measured byasset turnover? (sales/total assets); and financial? leverage, asmeasured by the equity multiplier? (total assets/total?equity).Financial Information? ($ in? millions, 2013)??CompanySalesNet IncomeTotal AssetsLiabilities??PepsiCo?$66,314?$6,652?$77,435?$53,028? Coca-Cola?$46,853?$8,551?$990,016?$56,756? McDonald's?$28,041?$5,772?$36,650?$20,5511) find the equity of each company. 4 decimals2) calculate the three components of the DuPont identity 4decimalsa) profit margin ratio b) asset turnover ratio c) equitymultiplier (for all 3)3) Find ROE for all 3, 4 decimals.4) Which company is the most operationally efficient, managementefficient, and best for the shareholders?

Other questions asked by students