3.1 Du Pont Identity You can find financial statements for Walt Disney Company on the "Investor" link at Disney’s home page, www.disney.com. For the three most recent years, calculate the Du Pont identity for Disney. How has ROE changed over this period? How have changes in each component of the Du Pont identity affected ROE over this period?

3.2 Ratio Analysis You want to examine the financial ratios for Dell Computer Corporation. Go to www.marketguide.com and type in the ticker symbol for the company (DELL). Next, go to the comparison link. You should find financial ratios for Dell and the industry, sector, and S&P 500 averages for each ratio.

a. What do TTM and MRQ mean?

b. How do Dell’s recent profitability ratios compare to their values over the past five years? To the industry averages? To the sector averages? To the S&P 500 averages? Which is the better comparison group for Dell: the industry, sector, or S&P 500 averages? Why?

c. In what areas does Dell seem to outperform its competitors based on the financial ratios? Where does Dell seem to lag behind its competitors?

d. Dell’s inventory turnover ratio is much larger than that for all comparison groups. Why do you think this is?

3.3 Standardized Financial Statements Go to the "Investor" link for Enron located at www.enron.com and locate the income statement and balance sheet for the two most recent years.

a. Prepare the common-size income statements and balance sheets for the two years.

b. Prepare the common-year income statement and balance sheet for the most recent year.

c. Prepare the common-size, common-base year income statement and balance sheet for the most recent year.

3.4. Sources and Uses of Cash Find the two most recent balance sheets for 3M at the "Investor Relations" link on the web site www.mmm.com. For each account in the balance sheet, show the change during the most recent year and note whether this was a source or use of cash. Do your numbers add up and make sense? Explain your answer for total assets as compared to your answer for total liabilities and owners’ equity.

3.5. Asset Utilization Ratios Find the most recent financial statements for Kmart at www.bluelight.com and Boeing at www.boeing.com. Calculate the asset utilization ratio for these two companies. What does this ratio measure? Is the ratio similar for both companies? Why or why not?