What areas are most likely to cause problems for company

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Reference no: EM132833452

Question - You have the following information:

 

Your Company

Industry Average

NI/Sales

6%

5%

Sales/Total Assets

2.5 Times

4.8 Times

Total Assets/Equity

1.25

0.9

Required -

a) Compare the ROE for your company with the ROE for the industry as a whole.

b) Based on the Dupont analysis, what areas are most likely to cause problems for your company if there is a recession? Briefly explain your choice.

c) What ratios might you calculate to further explore the potential problems identified in Part b.?

Name them and write the formula, don't calculate them.

Briefly explain why you would analyze these particular ratios.

Reference no: EM132833452

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