Answer:
a) DuPont analysis for Johnson International
2013: 0.059 x 2.11 x 1.75 = 0.2179 = 21.79%
2014: 0.058 x 2.18 x 1.75 = 0.2213 = 22.13%
2015: 0.049 x 2.34 x 1.85 = 0.2121 = 21.21%
b) DuPont analysis for industry averages
2013: 0.054 x 2.05 x 1.67 = 0.2121 = 21.21%
2014: 0.047 x 2.13 x 1.69 = 0.1692 = 16.92%
2015: 0.041 x 2.15 x 1.64 = 0.1446 = 14.46%
c) Johnson International's drivers follow the same tendency as the industry's average, e.g. net profit margin decreased in a similar manner, and total asset turnover increased also in a similar manner to the industry's average. The only driver that doesn't follow the industry's trend is financial leverage. While other companies in the same industry decreased their financial leverage, Johnson increased it. You should further analyze why this happened and what are the potential consequences.
Explanation:
The DuPont analysis is used to break down ROE into 3 different components and that way you can analyze whether a company's high ROE comes along with a high risk. The following formula is used to calculate ROE based on 3 different factors:
R
OE = net pro
fit margin x total assets turnover x financial leverage
Answer: Company Pays $1640
Carol Bryd pays $410
Explanation:
The total bill is $2300 and the deductible needs to be taken out.
$2300-$250
=$2050
Company Payment.
Company Pays 80% which translates to 0.8
0.8*2050
= $1640 is the company Payment.
Carol then pays the difference which is
$2050 - $1640
= $410
Carol pays $410
Answer:
liberalization (free trade policy)
Explanation:
Liberalization trade policy is the opposite to protectionism. The aim of this policy is to boost the economical trade with other countries. International trade under this policy affects prices as they decrease as a result of the imports made from countries were the production of those products is cheaper.
Answer:
The computations are shown below:
Explanation:
The computation is shown below:
Overall portfolio Expected rate of return = Risky portfolio expected rate of return × investment proportion + t- bill rate × 1 - investment proportion
0.15 = 0.20(y) + 0.07(1 - y)
0.15 = 0.20y + 0.07 - 0.07y
So,
y = 61.54%
2. Now Standard Deviation is
= investment proportion × standard deviation
= (0.6154) × (0.25)
So,
Standard Deviation = 15.38%
2. We Use Sharpe Ratio to choose out the right stock which is shown below:
Sharpe Ratio = (Expected rate of return - Risk free rate of return) ÷ Standard deviation
For Stock A, it is
= (22% - 12%) ÷ 20%
= 0.5
For Stock B, it is
= (28% - 12%) ÷22%
= 0.73
Since the Sharpe ratio has highest in Stock B and the same is to be choose
Possibly medium exchange or lots or loans?
