Question

What is the DuPont analysis for Exxonmobil from 2016 and 2017? What is the significant changes that may affect the ROE from 2016 to 2017? Identify what areas are responsible and investigate the financial statements futher by calculating few financial ratios in that area. Determine whether the firms FIXED or CURRENT ASSESTS have changed significantly? Has Exxonmobil's cash position changed during this time? Explain. This question is fromFinancial Management.

Answer 1

the du pont analyses for EXXONMOBIL for 2016 is : ALL FIGURES ARE IN BILLIONS

net profit margin * asset turniover * financial leverage

please refer the annula statement nad balance sheet for 2016,2017

we get the following figures :

net income: 1.68 billion

sales : $61.02 billion

assets : $330.31

equity : $167.33

2016 : 1.68/ 61.02 * 61.02/330.31 * 330.31/167.33 = 1.09%

2017:

net income : $8.38

sales : $66.52

assets : $348.69

equity : $187.69

ROE = 0.12 * 0.191* 1.86

= 4.26%

THE ROE HAS INCREASED IN 2017, BECAUSE OF INCREASE IN THE NET INCOME MARGIN AND THE FINANCIAL LEVERAGE HAS DECREASED FROM 1.97 TO 1.86 .

RETURN ON ASSETS (2016) : NET INCOME / ASSETS = $1.68/ 330.31 = 0.51

RETURN ON ASSETS(2017) : NET INCOME/TOTAL ASSETS = $8.38/ 348.69 = 2.4%

RETURN ON EQUITY :

NET INCOME / EQUITY

FOR 2016 : $ 1.68/ $ 167.33 = 1%

FOR 2017: $8.38/ 187.69 = 4.46%

FIXED ASSETS OF THE FIRM IN 2016 : $244.224 B

CURRENT ASSETS FOR THE FIRM IN 2016 : $41.42 BILLION

FIXED ASSETS FOR THE FIRM IN 2017 : $252.63

CURRENT ASSETS FOR THE FIRM IN 2017 : 47.13 B

THEREFORE, THE FIXED AND CURRENT ASSET POSITION HAS INCREASED IN 2017 IN COMPARISON TO 2016.

YES , THE CASH POSITION WHICH ARE THE RETAINED EARNINGS HAS ALSO INCREASED FROM 2016 TO 2017.

IN 2016 : $407.03

IN 2017 : $ 414.54