1) A ratio analysis for the last fiscal year using at least two ratios from each
ID: 2613052 • Letter: 1
Question
1) A ratio analysis for the last fiscal year using at least two ratios from each of the following categories:
a. Liquidity
b. Financial leverage
c. Asset management
d. Profitability
e. Market value
2) Calculate Return on Equity (ROE) using the DuPont system.
3) Assess management performance by calculating Economic Value Added (EVA).
FOURTH QUARTER FULL YEAR
Income Statement
Q4/ 20144 € million
Q4/ 2013 € million
Deviation
1-12/2014
€ million
1-12/2013
€ million
Deviation
Sales
Cost of sales
450,8
-413,0
698,3
-396,7
7.5%
4.1%
2,972.0
-1,586.7
2,985.3
-1,597.8
-0.4%
-0.7%
Gross Profit
- in % of consolidated sales
Royalty and commission income
Other operating income and expenses
337.8
45.0%
5.2
-332.5
301.6
4302%
5.7
-306.2
12.0%
7.7
8.6%
1,385.4
46.6%
19.4
-1,276.8
1,387.5
46.5%
20.8
-1.216.9
-0.2%
-6.7%
4.9%
Operating result before special items
- in % of consolidated sales
Special items
10.6
1.4%
0.0
1.1
0.2%
-129.0
892.2%
-100.0%
128.0
4.3%
0.0
191.4
6.4%
-129.0
-33.1%
-100.0%
Operating result (EBIT)
- in % of consolidated sales
Financial result / Income from associated companies
10.6
1.4%
-1.0
-127.9
-83.3%
0.8
-108.3%
-223.5%
128.0
4.3%
-6.2
62.5
2.1%
-8.7%
104.9%
-28.8%
Earnings before ---taxes (EBT)
- in % of -------------consolidated sales
Taxes on income---
- Tax rate-------------
Net earnings ------attributable to non-controlling interests
9.6
1.3%
-4.7%
48.6%
-9.5
-127.1
-18.2%
18.6
14.6%
-6.7
-107.5%
-125.0%
42.0%
121.8
4.1%
-37.0
30.4%
-20.8
53.7
1.8%
-32.5
60.5%
-15.9
126.6%
13.7%
30.5%
Net earnings
-4.6
-115.2
-96.0%
64.1
5.3
1,103.0%
Earnings per share (€)
Earnings per share (€) - diluted
-0,30
-0,30
-7,71
-7,71
-96,0%
-96,0%
4,29
4,29
0,36
0,36
1.103.0%
1.103,1%
Weighted average shares outstanding
Weighted average shares outstanding - diluted
14,940
14,940
14,940
14,941
0,0%
0,0%
Balance Sheet
Balance Sheet
Dec 31,2014 € million
Dec 31, 2013 € million
Deviation
Assets
Cash and cash equivalents
401,5
390,1
2,9%
Inventories
571,5
521,3
9,6%
Trade receivables
449,2
423,4
6,1%
Other current assets (Working Capital related)
202,4
167,8
20,6%
Other current assets
58,0
11,6
400,9%
Current Assets
1.682,5
1.514,2
11,1%
Deferred taxes
178,8
164,2
8,9%
Other non-current assets
688,7
630,1
9,3%
Non-current assets
867,5
794,3
9,2%
Total Assets
2.549,9
2.308,5
10,5%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current financial liabilities
19,8
25,1
-21,1%
Trade payables
515,2
373,1
38,1%
Other current liabilities (Working Capital related)
252,1
211,1
19,4%
Other current liabilities
35,5
81,6
-56,5%
Current liabilities
822,6
690,8
19,1%
Deferred taxes
54,6
50,3
8,5%
Pension provisions
26,0
28,1
-7,3%
Other non-current liabilities
28,4
42,1
-32,5%
Non-current liabilities
109,0
120,4
-9,4%
Shareholders' equity
1.618,3
1.497,3
8,1%
Total Liabilities and Shareholders' equity
2.549,9
2.308,5
10,5%
******** Please do all 5 questions.... I have included the income statement from 2014 with 2013. Please let me know if you need anything else instead of just answering one question. I need all questions answered.... **********
Thank you. Please DO NOT copy and paste answers from other questions.
Income Statement
Q4/ 20144 € million
Q4/ 2013 € million
Deviation
1-12/2014
€ million
1-12/2013
€ million
Deviation
Sales
Cost of sales
450,8
-413,0
698,3
-396,7
7.5%
4.1%
2,972.0
-1,586.7
2,985.3
-1,597.8
-0.4%
-0.7%
Gross Profit
- in % of consolidated sales
Royalty and commission income
Other operating income and expenses
337.8
45.0%
5.2
-332.5
301.6
4302%
5.7
-306.2
12.0%
7.7
8.6%
1,385.4
46.6%
19.4
-1,276.8
1,387.5
46.5%
20.8
-1.216.9
-0.2%
-6.7%
4.9%
Operating result before special items
- in % of consolidated sales
Special items
10.6
1.4%
0.0
1.1
0.2%
-129.0
892.2%
-100.0%
128.0
4.3%
0.0
191.4
6.4%
-129.0
-33.1%
-100.0%
Operating result (EBIT)
- in % of consolidated sales
Financial result / Income from associated companies
10.6
1.4%
-1.0
-127.9
-83.3%
0.8
-108.3%
-223.5%
128.0
4.3%
-6.2
62.5
2.1%
-8.7%
104.9%
-28.8%
Earnings before ---taxes (EBT)
- in % of -------------consolidated sales
Taxes on income---
- Tax rate-------------
Net earnings ------attributable to non-controlling interests
9.6
1.3%
-4.7%
48.6%
-9.5
-127.1
-18.2%
18.6
14.6%
-6.7
-107.5%
-125.0%
42.0%
121.8
4.1%
-37.0
30.4%
-20.8
53.7
1.8%
-32.5
60.5%
-15.9
126.6%
13.7%
30.5%
Net earnings
-4.6
-115.2
-96.0%
64.1
5.3
1,103.0%
Earnings per share (€)
Earnings per share (€) - diluted
-0,30
-0,30
-7,71
-7,71
-96,0%
-96,0%
4,29
4,29
0,36
0,36
1.103.0%
1.103,1%
Weighted average shares outstanding
Weighted average shares outstanding - diluted
14,940
14,940
14,940
14,941
0,0%
0,0%
Explanation / Answer
Ans1) Liquidity:
Working Capital Ratio:Current Assets/Current Libilities = Current Assets-16826 & Current Liabilities-8226
Working Capital Ratio- 16826/8226=2.045
Quick Ratio:Cash + Marketable Securities + Accounts Receivables/ Current Liabilities = (4015+0+4492)/8226=1.034
Profitability:
Net Profit MArgin = Net Income/Net Sales*100 ; 64.1/2972*100 = 2.157%
Operating Income Margin = Operating income / Net Sales ; 121.8 (EBT) / 2972*100 = 4.098%
Ans2) Retunr on Equity (Using Du Pont)
Net Income/Salesx Sales/Assets x Assets/Equity ; Net Income- 64.1, Sales- 2972, Assets-23085, Equity-16183
64.1/2972 x 2972/23085 x 23085/16183= 0.02156 x 0.12874 x 1.42649 = 0.00428*100= 0.4%
Ans3) Performance assessment using EVA:
EVA = Net Operating Profit after taxes - (Capital Invested x Cost of Capital)
Net Operating Profits after taxes = 121.8 - (121.8*30.4%) = 84.77
Cost of capital or return on quity - Net Income / Equity - 64.1 / 16183 = 0.4%
Capital Invested - 16183 x 0.4% = 16118.27
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