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Based on the three-year financial statements you prepared, calculate ROE in the DuPont way (not using the original definition of ROE) that are covered in the video of Week 15 for your company in the...

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  1. Based on the three-year financial statements you prepared,calculate ROE in the DuPont way (not using the original definition of ROE)that are covered in the video of Week 15 for your company in thelast three years. Please use the same “Ratios” sheet in your Excel file where you calculated other four categories of ratiosand label each ratio well. Please show your calculation of ratios in the Ratios sheet as well. Please upload/attach the Excel file in your post.
  2. Given the calculated market value ratios of your companies, conduct analysis of your company. Compare and evaluate market value ratios of the 2 (or 3) companies of your group.
Answered Same Day Dec 03, 2021

Solution

Akshay Kumar answered on Dec 03 2021
122 Votes
Income Statement
    AutoZone (AZO) Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands    12 Months Ended                Common-Size                Change
        Aug. 29, 2020    Aug. 31, 2019    Aug. 25, 2018        Aug. 29, 2020    Aug. 31, 2019    Aug. 25, 2018        2019 to 2020    2018 to 2019
    Income Statement [Abstract]                    (B#/$B$4)    (C#/$C$4)    (D#/$D$4)        (F#-G#)    (G#-H#)
    Net sales    $12,631,967    $11,863,743    $11,221,077        100.00%    100.00%    100.00%        0.00%    0.00%
    Cost of sales, including warehouse and delivery expenses    5,861,214    5,498,742    5,247,331        46.40%    46.35%    46.76%        0.05%    -0.41%
    Gross profit    6,770,753    6,365,001    5,973,746        53.60%    53.65%    53.24%        -0.05%    0.41%
    Operating, selling, general and administrative expenses    4,353,074    4,148,864    4,162,890        34.46%    34.97%    37.10%        -0.51%    -2.13%
    Operating profit    2,417,679    2,216,137    1,810,856        19.14%    18.68%    16.14%        0.46%    2.54%
    Interest expense, net    201,165    184,804    174,527        1.59%    1.56%    1.56%        0.03%    0.00%
    Income before income taxes    2,216,514    2,031,333    1,636,329        17.55%    17.12%    14.58%        0.42%    2.54%
    Income tax expense    483,542    414,112    298,793        3.83%    3.49%    2.66%        0.34%    0.83%
    Net income    $1,732,972    $1,617,221    $1,337,536        13.72%    13.63%    11.92%        0.09%    1.71%
    Weighted average shares for basic earnings per share    23,540    24,966    26,970        0.19%    0.21%    0.24%        -0.02%    -0.03%
    Effect of dilutive stock equivalents    553    532    454        0.00%    0.00%    0.00%        -0.00%    0.00%
    Weighted average shares for diluted earnings per share    24,093    25,498    27,424        0.19%    0.21%    0.24%        -0.02%    -0.03%
Balance Sheet
    AutoZone (AZO) Consolidated Balance Sheets - USD ($) $ in Thousands                    Common-Size                Change
        Aug. 29, 2020    Aug. 31, 2019    Aug. 31, 2018        Aug. 29, 2020    Aug. 31, 2019    Aug. 31, 2018        2019 to 2020    2018 to 2019
    Cu
ent assets:                    B#/$B$23    C#/$C$23    D#/$D$23        (F#-G#)    (G#-H#)
    Cash and cash equivalents    $1,750,815    $176,300    $217,824        12.14%    1.78%    2.33%        10.36%    -0.55%
    Accounts receivable    364,774    308,995    258,136        2.53%    3.12%    2.76%        -0.59%    0.36%
    Merchandise inventories    4,473,282    4,319,113    3,943,670        31.01%    43.65%    42.19%        -12.63%    1.45%
    Other cu
ent assets    223,001    224,277    216,239        1.55%    2.27%    2.31%        -0.72%    -0.05%
    Total cu
ent assets    6,811,872    5,028,685    4,635,869        47.23%    50.82%    49.60%        -3.59%    1.22%
    Property and equipment:                    B#/$B$23    C#/$C$23    D#/$D$23        (F#-G#)    (G#-H#)
    Land    1,205,228    1,147,709    1,107,092        8.36%    11.60%    11.84%        -3.24%    -0.25%
    Buildings and improvements    4,020,271    3,895,559    3,698,010        27.87%    39.37%    39.56%        -11.49%    -0.20%
    Equipment    2,158,251    1,991,042    1,841,330        14.96%    20.12%    19.70%        -5.16%    0.42%
    Leasehold improvements    586,839    552,018    504,656        4.07%    5.58%    5.40%        -1.51%    0.18%
    Construction in progress    165,953    126,868    140,535        1.15%    1.28%    1.50%        -0.13%    -0.22%
    Property and equipment    8,136,542    7,713,196    7,291,623        56.41%    77.94%    78.01%        -21.53%    -0.07%
    Less: Accumulated depreciation and amortization    -3,627,321    -3,314,445    15,301,849        -25.15%    -33.49%    163.71%        8.35%    -197.20%
    Property and equipment, net    4,509,221    4,398,751    4,218,400        31.26%    44.45%    45.13%        -13.19%    -0.68%
    Operating lease right-of-use assets    2,581,677                17.90%    0.00%    0.00%        17.90%    0.00%
    Goodwill    302,645    302,645    302,645        2.10%    3.06%    3.24%        -0.96%    -0.18%
    Defe
ed income taxes    27,843    26,861    34,620        0.19%    0.27%    0.37%        -0.08%    -0.10%
    Other long-term assets    190,614    138,971    155,446        1.32%    1.40%    1.66%        -0.08%    -0.26%
    Other long-term assets, total    3,102,779    468,477    492,711        21.51%    4.73%    5.27%        16.78%    -0.54%
    Assets    14,423,872    9,895,913    9,346,980        100.00%    100.00%    100.00%        0.00%    0.00%
    Cu
ent liabilities:                    B#/$B$43    C#/$C$43    D#/$D$43        (F#-G#)    (G#-H#)
    Accounts...
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