re given financial statements and a Dupont analysis for Tesco and Ahold. What do you conclude about the two compani

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
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ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
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Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business
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You are given financial statements and a Dupont analysis for Tesco and Ahold. What do you conclude about the two companies’ performances based on these numbers?

Exhibit 6 DuPont Decomposition of Ahold and Tesco
X
Xx
=
Decomposing
Profitability
NI/Sales
Sales/Beg Total
Assets
Beg Total
Assets/Beg Equity
ROE
(ROA*Financial
Leverage)
FY2009
3.20%
2.05
2.90
19.07%
Ahold
FY2010 FY2011
2.89%
2.12
2.56
15.68%
3.36%
1d Gum Can
2.06
2.49
17.21%
FY2009
4.09%
1.25
3.53
18.11%
Tesco
2010
FY2010
4.39%
1.31
3.13
18.19%
FY2011
4.35%
1.37
2.84
16.97%
Transcribed Image Text:Exhibit 6 DuPont Decomposition of Ahold and Tesco X Xx = Decomposing Profitability NI/Sales Sales/Beg Total Assets Beg Total Assets/Beg Equity ROE (ROA*Financial Leverage) FY2009 3.20% 2.05 2.90 19.07% Ahold FY2010 FY2011 2.89% 2.12 2.56 15.68% 3.36% 1d Gum Can 2.06 2.49 17.21% FY2009 4.09% 1.25 3.53 18.11% Tesco 2010 FY2010 4.39% 1.31 3.13 18.19% FY2011 4.35% 1.37 2.84 16.97%
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