Du Pont Identity You can find financial statements for Walt Disney Company at Disney's home page, disney.go.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?
Ratio Analysis You want to examine the financial ratios for Dell Computer Corporation. Go to www.investor.reuters.com and type in the ticker symbol for the company (DELL). Now 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?
Applying Percentage of Sales Locate the most recent annual financial statements for Du Pont at www.dupont.com under the "Investor Center" link. Locate the annual report. Using the growth in sales for the most recent year as the projected sales growth for next year, construct a pro forma income statement and balance sheet. Based on these projections, what are the external funds needed?
Growth Rates You can find the home page for Caterpillar, Inc., at www.cat.com. Go to the Web page and find the most recent annual report. Using the information from the financial statements, what is the sustainable growth rate?
