Compute the roi for each company

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Assignment

Use the following data for Apple and Dell for year 2008 (real data, in $ million):

Apple

Dell

$3,190

Profit (operating income)

$6,275

$3,190

Sales revenue

$32,479

$61,101

Investment (total assets)

$32,460

$27,031

Required:

a) compute the ROI for each company.

Apple ROI=%(if you get say 12.5%, enter 12.5, not 12.5% or 0.125)
Dell ROI=%

b) use the DuPont method to decompose ROI into ROI = profit margin * asset turnover.

In other words, compute profit margin and asset turnover for each company:

Apple profit margin=, asset turnover=(Enter both as a fraction of 1, not as percentage. I.e., if the profit margin is 0.045 (4.5%) and asset turnover is 3.42 (342%), enter 0.045 and 3.42)

Dell profit margin=, asset turnover=

If you multiply profit margin * asset turnover, you should get the ROI from part (a)

c) Which company has higher profit margin? Does it make sense, based on what you know about Apple and Dell?

Reference no: EM131784788

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