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Financial Statement Analysis _ DuPont Decomposition

This assignment gives you an opportunity to use excel to calculate financial ratios.  Submit using D2L.

BE SURE TO SAVE YOUR WORK.

Goals for this assignment:

Collect financial statements

Gather the financial statements (income statement and balance sheet) of the company assigned to you (check page 2) from the https://www.google.com/finance or https://finance.yahoo.com/ website. In the website you put the ticker symbol in the search bar and press “Enter”. Under the heading “Company”, select the link for Financials. You will see options for “income statement” and “balance sheet.”  You want annual statements (select “Annual Data”).  We will use the financial statements for the past and latest four years available.

Calculate the DuPont decomposition

Calculate the DuPont Decomposition for each of the four years for your company. 

The DuPont Decomposition of ROE is

ROE = Net Income/Total Equity

= NI/PBT * PBT/EBIT * EBIT/Sales * Sales/Total Assets * Total Assets/Total Equity

Present all these ratios in a tabular format.

Make observations.

Using the financial ratios please answer the following question:

Has ROE been rising or falling? 

If so, what has contributed to this change?

  Students Company
  MSFT

Financial Statement Analysis _ DuPont Decomposition

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