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
Flat money, commodity money, the gold standard and representative money is the money that would have the least value if people lost confidence in the government. Flat money is the currency that the government has declared as legal tender but it is not backed by a physical commodity. Representative money is any money that its face value is greater than its actual value. Commodity money is money whose value comes from the commodity in which it is made of. The gold standard is economic unit of account which is based on the fied amount of gold.
Answer:
Explanation:
The journal entry is shown below:
On January 1, 2017:
Unearned compensation A/c Dr $120,000
To Common stock (4,000 × $3) $20,000
To Paid-in capital in excess of par value $100,000
(Being restricted stock is issued and the remaining balance is credited to the paid-in capital)
On December 31, 2018:
Compensation expenses A/c Dr $30,000
To Unearned compensation $30,000
(Being compensation expenses are recorded)
The compensation expenses is computed below:
= (Fair value of stock) ÷ (number of years)
= ($120,000) ÷ (4 years)
= $30,000
Answer:
11.78%
Explanation:
Weighted average cost of capital WACC determines firms cost of capital. It includes all sources of finance which are included in firms capital structure. The WACC is calculated with given formula:
WACC = E/V Re + D/V * Rd (1 - T)
Re = cost of equity
V = Firms Market value of Debt and Equity
Rd = Cost of debt
E = market value of equity
D = market value of debt
T = Marginal Tax rate
WACC = 14.7 * 1 / 1.45 + 8.1 * 0.45 / 1.45 (1 - .34)
WACC = .1013 + 0.0165
WACC = 11.78%
Answer:
$18,287.32
Explanation:
We use the PMT formula i.e shown in the attachment below:
Data provided in the question
Present value = $0
Future value = $80,000
Rate of interest = 6%
Time period = 4 years
The formula is shown below:
= NPER(Rate;PMT;PV;-FV;type)
The future value come in negative
So, after solving this, the annual payments should be made is $18,287.32
