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1. Summary income statements and balance sheets are presented for the three largest companies in the...

1. Summary income statements and balance sheets are presented for the three largest companies in the chemical industry for fiscal year 2016 (in millions).
Income Statement Balance Sheet
DuPont Dow PPG DuPont Dow PPG
Revenues 24594 48158 14751 Cash & Market Securities 5967 6607 1863
COGS 14440 37324 8063 Receivables, net 4789 8831 2692
Gross Profit 10154 10834 6688 Inventories 5673 7363 1546
SG&A Expenses 4319 3304 4630 Total Current Assets 17117 23659 6452
Net Income 2513 4318 877 Fixed Assets, net 9231 23486 2759
Total Assets 39964 79511 15769
Total Current Liabilities 8897 12604 4240
Total Liabilities 29966 53524 10943
Total Equity 9998 25987 4826
Preferred Stock 237 0 0
Working Capital 8220 11055 2212
Common Equity 9761 25987 4826
Complete the following tables using common-size analysis:
6. Given the information above, calculate the DuPont Model for the three chemical companies. Rate DuPont performance for these companies from 1 to 10.
DuPont Dow PPG
Profitability
Activity
Return on Assets DuPont Dow PPG
Solvency Common Equity 2016 9761 25987 4826
Return on Equity Common Equity 2015 9756 21374 4983
Ratings

Solutions

Expert Solution

Answer 1: To complete the following tables using common-size analysis:

  • For Income Statement, we will consider Revenue as 100 % and calculate the % of other items as a percentage of Revenue
  • For Balance Sheet, we will consider Total Asset as 100 % and calculate the % of other items as a percentage of Total Asset
  • See attached the Image for Common Size Statement

jeff jeffy answered 4 months ago
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