assignmentPlease read the assigement Ratio PDF.The two companies selected are Boeing and Korea...

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assignmentPlease read the assigement Ratio PDF.The two companies selected are Boeing and  Korea Aerospace Industries Ltd  	 		 			 		 	  Analyze each of the firms taking into consideration the components of ROE as identified above. This will require you to do some additional research regarding ROE analysis.Include the downloaded industry spreadsheet for the industry you selected.Identify the firms you selected within the spreadsheet by changing the color of the font for that firm on each tab to red.Prepare a table that calculates the ROE for each firm using the three components. Make sure each column is labeled. (You should have columns that are labeled ROE, Net Profit Margin, Asset Turnover, Equity Ratio) Create a similar table for the market value measures.Write a brief paper; about two pages maximum (2 plus/minus a half page). Paper should address the reasons why one firm has a high ROE, why one firm has a low ROE and what could be done to improve the lower performing firm based on ROE (if it is really performing at a lower level). Perform similar contrast and comparisons for the market value ratios.Be sure to address issues such as marketing, asset utilization, financing and if your chosen firm appears to be under or overvalued.
	
Document Preview: Financial Ratios Assignment and Research Activity 
Note: This activity will be submitted as Activity 2.4. However, it is recommended you begin to start work on 
this activity in Module 1.  Most of the content necessary to complete the assignment is provide in Module1. 
Submission of the assignment will occur in Module 2.

This assignment will require you to perform some analysis of financial ratios and some research to 
further your understanding of financial ratios from other sources. You will select an industry and two 
firms within the industry as described below and analyze the Return on Equity (ROE) of both firms and 
the market valuation ratios. 
 
To retrieve the data you will need to do the following steps: 
 
1. Go the the Locating Company and Industry Information Research Guide:  
http://guides.erau.edu/c.php?g=153738&p=1009866 
2. Click on Key Business Ratios 
3. Follow instructions for Mergent Online to generate report including industry and selected firms 
 
Step Action 
Go the the Locating Company and Industry Information Research Guide:  
1 
http://guides.erau.edu/c.php?g=153738&p=1009866 
Click on Key Business Ratios 
2 
 
Follow instructions for Mergent Online to generate report including industry and selected firms 
3

Your submission should include a spreadsheet as described in the rubric.  This should include your 
selected firms as well as a summary of the industry’s ratios. 
 
For this assignment you will be looking at a number of ratios for a firm and comparing to industry 
averages.For this assignment we are going to focus on one ratio which can actually be calculated using three 
other ratios. That ratio is the Return on Equity. Return on Equity can be calculated in the following 
manor:

ROE = net profit margin x asset turnover / equity ratio 
 
= earnings to owners x revenues / common equity 
revenues  assets assets

= earnings to owners x revenues x assets 
 
revenues assets common equity 
 
look at what cancels and you...

David · Accepted Answer

Du Pont Analysis 
One of method to judge financial health of the company is through Du Pont analysis. It 
provides over data for overall return on equity to investors based on return on assets, equity 
multiplier, and net profit margin.  
Return on Equity = net profit margin * asset turnover * equity multiplier  
Net profit margin is measure of profitability, asset turnover is a measure of efficiency and 
equity multiplier is measure of risk with in the firm.

assignmentPlease read the assigement Ratio PDF.The two companies selected are Boeing and Korea Aerospace Industries Ltd Analyze each of the firms taking into consideration the components of ROE as...

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