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P3-36: DuPont system of analysis Use the following 2016 financial information for ATT and Verizon to...

P3-36: DuPont system of analysis Use the following 2016 financial information for ATT and Verizon to conduct a DuPont system of analysis for each company.

ATT

Verizon

Sales

$163,786

$125,980

Earnings available for common stockholders

13,333

13,608

Total assets

403,821

244,180

Stockholders’ equity

124,110

24,032
  1. Which company has the higher net profit margin? Higher asset turnover?
  2. Which company has the higher ROA? The higher ROE?
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Answer #1

a) Verizon for both questions

b) Verizon for both questions

ATT Verizon
Sales 163786 125980
Earnings 13333 13608
Total assets 403821 244180
Stockholders Equity 124110 24032
Net Profit Margin 8.1% 10.8% Earnings/Sales
Asset turn over ratio 40.6% 51.6% Net Sales/Average Assets
Return on assets 3.3% 5.6% Net Income/Total Assets
Return on Equity 10.7% 56.6% Net Income/Total Equity
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