Based on the results of your analysis above, assess the company\'s overall profi

Question

Based on the results of your analysis above, assess the company's overall profitability and dividend policy. Explain which ratios indicate particular strengths and/or weaknesses within the company. Assume the following industry averages: (3 points) FY 2017 ROI = 2.3%; ROE = 19.8%; Gross Profit = 34.1%; Operating Profit = 4.1%; P/E ratio = 26.8; Div Yield = 1.5% FY 2016 ROI = 5.0%; ROE = 43.9%; Gross Profit = 31.6%; Operating Profit = 3.7%; P/E ratio = 20.5; Div Yield = 1.8%

Company average: FY 2017 ROI = 19.7%; ROE = 298.2%; Gross Profit = 2803%; Operating Profit = 14.5%; P/E ratio = 28.3; Div Yield = 1.7%

FY 2016 ROI =18.7 %; ROE = 149.4%; Gross Profit = 31.6%; Operating Profit = 14.2%; P/E ratio = 21.4; Div Yield = 2.0%

Explanation / Answer

FY 2017 FY 2016 Company Industry Company Industry Average Average Average Average ROI 19.70% 2.30% 18.70% 5.00% ROE 298.20% 19.80% 149.40% 43.90% Gross Profit 2803% 34.10% 31.60% 31.60% Operating Profit 14.50% 4.10% 14.20% 3.70% P/E ratio         28.30         26.80         21.40         20.50 Div yield 1.70% 1.50% 2.00% 1.80% Overall Profitability: Return on Investment(ROI) Strong Return on Equity(ROE) Strong Opearing Profit Strong Dividend policy: Dividend yield Nearly As per industry average

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