- Using DuPont analysis is a quick and relatively easy way to assess the overall health of a firm. Go to http://finance.yahoo.com/q?s=ZNGA&ql=1 to the left you will see a list of links for further information. Near the bottom of the link column are financial statements. Open the firm’s Income Statement and Balance Sheet and use the information there to calculate all parts of the DuPont Ratio for the past three years. Discuss the trends revealed in each ratio.
Here is the DuPont ratios:
· ROE = (earnings before tax / sales) * (sales / assets) * (assets / equity) * (1 – tax rate)
· ROE = [(EBIT / sales) * (sales / assets) – (interest expense / assets)] * (assets / equity) * (1 – tax rate)
· ROE = [(operating profit margin) * (asset turnover) – (interest expense rate)] * (equity multiplier) * (tax retention rate)
- As a manager of an organization, Binomial Probability Distribution is probably the best way to calculate annual employee turnover or can you think of a better way? Identify the statistical formula and give an example of how this is used. What additional data, if any, you would need to determine your estimate(s). How could this be improved if needed.