Question

Based on the results of your analysis above, assess the company's overall profitability and dividend policy. Explain which ratios indicate particular strengths and/or weaknesses within the company. Assume the following industry averages: (3 points) FY 2017 ROI = 2.3%; ROE = 19.8%; Gross Profit = 34.1%; Operating Profit = 4.1%; P/E ratio = 26.8; Div Yield = 1.5% FY 2016 ROI = 5.0%; ROE = 43.9%; Gross Profit = 31.6%; Operating Profit = 3.7%; P/E ratio = 20.5; Div Yield = 1.8%

Company average: FY 2017 ROI = 19.7%; ROE = 298.2%; Gross Profit = 2803%; Operating Profit = 14.5%; P/E ratio = 28.3; Div Yield = 1.7%

FY 2016 ROI =18.7 %; ROE = 149.4%; Gross Profit = 31.6%; Operating Profit = 14.2%; P/E ratio = 21.4; Div Yield = 2.0%

Answer 1

		FY 2017		FY 2016
		Company	Industry	Company	Industry
		Average	Average	Average	Average
	ROI	19.70%	2.30%	18.70%	5.00%
	ROE	298.20%	19.80%	149.40%	43.90%
	Gross Profit	2803%	34.10%	31.60%	31.60%
	Operating Profit	14.50%	4.10%	14.20%	3.70%
	P/E ratio	28.30	26.80	21.40	20.50
	Div yield	1.70%	1.50%	2.00%	1.80%
	Overall Profitability:
	Return on Investment(ROI)	Strong
	Return on Equity(ROE)	Strong
	Opearing Profit	Strong
	Dividend policy:
	Dividend yield	Nearly As per industry average