Question

Using DuPont analysis is a quick and relatively easy way to assess the overall health of...

Using DuPont analysis is a quick and relatively easy way to assess the overall health of a firm.This weeks lesson (Page 4) includes information on the DuPont equation.Go to finance.yahoo.com and choose a company by entering the company name in the box to the left of Get Quotes.Once you have the company overview page open, to the left you will see a list of links for further information on that firm. Near the bottom of the link column are financial statements. Open the firms income statement and balance sheet and use the information there to calculate all parts of the DuPont Ratio for the past three years; do not use Nike.If your firm does not have 3 years of full information, choose a different firm. Report each ratio value as well as the numerator and denominator of each of the 4 ratios for the past 3 years (12 ratios in total). Discuss the trends revealed in each ratio. Please be sure to note your firms name in the title of your post and please do not duplicate firms.

Homework Answers

Answer #1
We will do Du Pont Analysis for Walmart
RoE = Net Income/Revenue * Revenue/Total Assets * Total Assets/Shareholder Equity
Values in Thousands
YE 01/31 2019 2018 2017
Revenue 514405000 500343000 485873000
Net Income 6670000 9862000 13643000
Net Margin (1) 1.30% 1.97% 2.81%
Assets 219295000 204522000 198825000
Asset Turnover (2) 235% 245% 244%
Share holder Equity 72496000 77869000 77798000
Equity Multiplier (3) 302% 263% 256%
ROE (1*2*3) 9.20% 12.66% 17.54%
So the Return on Equity has decreased over time for Walmart due to a reduction in Net Margin
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