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Question 3 Below are some summary numbers for a firm for fiscal-(Answered)

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Question 3

Below are some summary numbers for a firm for fiscal years 20

1

4 and 20

1

5 (in millions of

dollars).


2014

2015

Sales

12,257

12,867

Operating income (after tax)

858

772

Net financial expense (after tax)

56

98

Comprehensive income

802

674

Average net operating assets

4,903

4,949

Average common equity

3,503

2,149


(a)

Calculate return on common equity (ROCE), return on net operating assets

(RNOA), and net borrowing cost (NBC) for the two years.

(b)

How much of the change in ROCE over the two years is due to:

(I)

Change in profit margin

(II)

Change in asset turnover

(III)

Change in financial leverage

(IV)

Change in borrowing

costs


 

Paper#9256721 | Written in 27-Jul-2016

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