Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (10% of the project grade).

2018: 11.9%
2019: 12.2%
2020: 14.3%

The DuPont Analysis allows us to further breakdown these numbers into three different components: Net Profit Margin (NPM), Asset Turnover, and Equity Multiplier. Each component’s calculation is:

•Net Profit Margin = Net Income/Total Sales

2018: 0.119/1 = 11.9% 2019: 0.122/1 = 12.2% 2020: 0 143/1 = 14.3%

•Asset Turnover = Total Sales/Total Assets

2018 : 1 / 20=0 .05 2019 : 1 / 21=0 .048 2020 : 1 / 22=0 .045

•Equity Multiplier = Total Assets / Shareholder’s Equity

2018 : 20 / 10=2 2019 : 21 / 11=1 .91 2020 : 22 / 12=1 .83

Investors can make more informed decisions by analyzing the ROE formula. This allows them to evaluate potential investments and growth opportunities within their portfolios.