Question

2. -13.33 points Question 2 (performance evaluation, DuPont method) Use the following data for Apple and Dell (in 5 million): Apple Dell Profit Operating income) 56,275 $3,190 Sales revenue 532.479 561,101 Investment (total assets) 532.460 527,031 Required: a) compute the ROI for each company. Apple ROI- % (if you get say 12.5%, enter 12.5, not 12.5% or 0.125) Dell ROI | | b) use the DuPont method to decompose ROI into ROI = profit margin asset turnover. In other words, compute profit margin and asset turnover for each company: Apple profit margin .asset turnover . (Enter both as a fraction of 1, not as percentage Dell profit margin= .asset turnover= If you multiply profit margin asset turnover, you should get the ROI from part(a) c) Which company has higher profit margin?(1 - Apple. 2-Dell) d) Which company has higher as turnover? 1-Apple. 2-Dell

Answer 1

a		Apple	Dell
	Operating Income	$6,275	$3,190
	Total invested Assets	$32,460	$27,031
	ROI =Operating Income / Total invested Assets	19.33%	11.80%
b	Sales Revenue	$32,479	$61,101
	Operating income	$6,275	$3,190
	Total invested Assets	$32,460	$27,031
	Margin =Net operating income / Revenue	19.32%	5.22%
	Turnover =Revenue / Total invested Assets	1.00	2.26
	ROI =Margin*Turnover	19.33%	11.80%
c	Apple has higher Profit margin
d	Dell has higher Asset Turnover