Benefits of DuPont Analysis

Benefits of DuPont Analysis The dynamic environment of the world today suggests that one should be apt enough to apply his skills immanent to a system and also external with respect to credit management function. These functions include financial planning, plausibility of a defined business strategy or whether a particular merger or acquisition is feasible or not. This has to be done in a rapid yet meaningful way so as to be of immediate need to a particular firm or investor. There are basically four major reasons for an effective financial statement analysis. These have been mentioned as follows: It is useful for long-run business viability so as to determine whether a firm would be able to provide adequate business return when compared to the amount of risks taken. This is essential for outside investors. It is also used by creditors so as to find out whether a potential buyer has the capability to service the loans that are being made or not. Also, the analysts concerned about the internal development of a firm, require financial statement analysis so as to monitor the outcome as a result of applying the policy decisions, to make future predictions with regard to the performance targets, and also make an assessment of the capital needs of a company. The function of DuPont analysis in this is that it is used as a tool to provide an overview of financial statement analysis for the purposes as stated and also provide a focus for such analysis. In order to assess the financial health of a firm from the perspective of an insider or an outsider, there are four major areas that are covered. These have been stated as follows: Liquidity Leverage Operational Efficiency Profitability In this process, the DuPont analysis can be used as a compass so as to help the analysts find out the areas that are of significant strength and weakness (as applicable) from the financial statements. DuPont analysis stands as an appropriate place to commence the financial statement analysis as it measures the Return on Equity (ROE). As this indicates the rate of growth of the ownersà ¢Ã¢â€š ¬Ã¢â€ž ¢ wealth, it becomes one of the most important ratios. So, DuPont analysis might not be able to provide a detailed description just like a proper financial statement analysis, but it certainly stands places in providing an excellent snapshot an impeccable starting point of financial analysis. It covers the major areas of profitability, operating efficiency and also leverage. It can be seen in the form of equations as follows: ROE = (Net Income/Sales) X (Sales/Average Assets) X (Average Assets/Average Equity) Net Income/ Sales: Profitability Sales/Average Assets: Total Asset Turnover Average Assets/Average Equity: Leverage Multiplier Further, as the requirement of the company stands, one can also calculate the Return on Assets (ROA) by making a DuPont Chart. This can be done in the following manner: ROA = (Profit before Income and Tax/ Total Assets) = (PBIT/Sales) X (Sales/ Total Assets) DuPont Calculations and Analysis (Note: In this case we are making a comparison of two years) Profitability: Net Income/Sales 2008 6,536,358,000/ 17,868,672,000 = 36.5% 2009 3,080,531,000/ 16,015,133,000 = 19% This ratio indicates the rate at which a company uses the sales to generate profits for the company. One can see that it has decreased tremendously over a year. This suggests that the company has been trying to lure the customers with better benefits so as to decrease its profits. As the total sales have increased only marginally, it indicates that the market is in a risky position with companies cutting on profits to maintain previous customers and generate new ones. Total Assets Turnover: Sales/Average Assets: Total Asset Turnover 2008 17,868,672,000/ 54,790,875,000 = 0.32 2009 16,015,133,000/ 60,690,798,000 = 0.27 Return on Total Assets indicates how well a company has been using its assets to generate sales. It is significant as a company might be generating a huge amount of profit out of sales involved, but then it doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t check the efficiency with which it is using the assets for generating the amount of sales involved. In this, case the operating efficiency has decreased which means that the company has either made long-term installations which have not been used to implement sales in the best possible manner or there is a deficiency in the company functioning. Leverage Multiplier: Average Assets/Average Equity 2008 54,790,875,000/ 36,536,040,000 = 1.5 2009 60,690,798,000/ 36,000,753,000 = 1.68 The leverage multiplier is used for determining the debt financing as compared to the equity financing of a company. Generally, if a company increases the debts over equity for financing its requirements, it does it as the cost of debt is less because of tax-deductible interests but then there is a larger risks involved here. A company would have to pay a certain amount for sure before they can make use of the net income. Here, the ratio has increased indicating the fact that Emaar has taken more debt than a year before which means that it requires immediate funding to carry out its operations. Return on Equity The above results can be combined to calculate the DuPont ratio which in this case is ROE. ROE for 2008: 18% ROE for 2009: 8.5% Now, we know that ROE determines the profit as compared to the shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ equity. This has decreased over a span of one year which signifies the fact that the company would find it difficult to arrange for internal cash as it seems less attractive for shareholders. This is also evident from the fact that leverage multiplier had increased significantly. Gross Profit Margin: EBIT/ Sales 2008 7,053,765,000/ 17,868,672,000 = 0.394 2009 6,811,358,000/ 16,015,133,000 = 0.425 The gross profit margin of the company has increased which is again indicative of the fact that the company is paying too much of interests which decreases the net income. Return on Assets 2008 12.0% 2009 5% The net return on assets of the company has also decreased indicating the fact that the company has so far not made the type of income it has been looking to make with the assets that it has. This shows that the company looks to make long-term benefits out of the assets that it has generated.

Thursday Night :: essays research papers

Thursday Night When I first started college, fall two thousand two, I was not really much of a partier. I would stay in most nights, talking to friends online, or visiting someone I knew on campus. All of this changed though, one Thursday during my second semester. I was in my last class for the day, chemistry laboratory. My friend Laura, who was also in the class had been trying to convince me to go to a party with her all semester. I, all semester, had been making excuses to not go. This day though, she finally convinced me by exclaiming, "But SueEllen, it's the last party of the semester!" I succumbed to her persuasiveness and went back to my dorm to prepare. My room-mate, Melissa, was bubbling with excitement when I told her the plans for the night. So we both started getting ready. I changed into the only pair of flares I owned, and a pink tank top. I had Melissa iron my hair for me, so I could wear it down, which is something that I don't usually do. The phone rang, and it was Laura. She was outside waiting for us, it was time to go. We arrived at the hosts apartment, and the feeling that you get when you go down a steep descent in a roller coaster quickly disappeared when we were introduced to everyone there. It was a very pleasant atmosphere, partly because the people were friendly, and partly because almost everyone was slightly, if not entirely intoxicated. At some point during the night, a commotion arose as someone walked through the door into the living room. I looked up, and everyone was yelling, "Rivers!". I had seen the kid around campus before, longish black hair worn under a baseball hat, blue eyes, and a lip ring. He was cute, but whenever I had seen him, he seemed kind of withdrawn and had an angry look on his face. Everyone settled back down a moment later, and commenced socializing and drinking. A couple of hours later, I was fairly inebriated, and there weren't that many people left at the party. Everyone had gone home to get some sleep. I was fairly tired myself, and almost started to nod off while I was sitting on the couch. I woke up a little though, and started a conversation with the person sitting next to me. I don't remember exactly what we talked about, but I'm sure it was the usual introductory conversation about what bands we listened to and what classes we were taking.

Knowledge Acquisition

Knowledge is obtained through different sources. Personal experiences, tradition, authority and intuition are factors in helping one acquire knowledge. In the human services discipline, these areas are essential in learning how knowledge is attained. Carper’s (1978) four types of knowledge best explain how personal experiences, tradition, authority and intuitions are essential in knowledge acquisition. First and foremost, ethical knowledge pertains to moral issues and one’s judgment based on professional principles and values. Intuition usually tells an individual when an action or event is deemed acceptable by society or not. In the field of human services, it is important to know what is morally good and bad and this can be considered as the strength of ethical knowledge. It helps a human services practitioner determine the action that would result to the improvement of the person’s well-being. However, this is contrary to the characteristics of science which entitles one to be objective wherein biases or value judgments are removed from the scientific process. Human services is a science wherein knowledge is obtained through systematic observations (Monette, Sullivan & De Jong in Hutchison, 2003). Second, aesthetic knowledge is concerned with the art of the disciplines. These arts may be in the form of a systematic process that a practitioner follows in her field (Carper in Walsh and Wigens, 2003). In this case, it can be perceived that the discipline of human services is rigid and static. On the contrary, as a science, it is an open-ended practice wherein discoveries and ideas continue to occur over time. Tradition best exemplifies this case wherein negates the idea that remains the same over time rather, it is dynamic. Third, personal knowledge is obtained from one’s experiences and interactions with his environment (Carper in Walsh and Wigens, 2003).   Personal experiences help one acquire values and biases that he applies to his daily life. It can be argued that personal knowledge cannot be a basis for knowledge because it is not systematic and not based on empirical findings. However, in the discipline of human services, this type of knowledge is essential in understanding behavior and actions of individuals. Lastly, empirical knowledge is based on observations and experimentations. In other words, it is founded on hard data and it is considered a fact. It is acknowledge that the field of human services is a science that strongly relies on empirical data. Since it is such, it is also a transformative process or a never-ending cycle that is constantly tested and questioned (Monette, Sullivan & De Jong in Hutchison, 2003). Facts and information are constantly updated in order to make them more accurate and correct. This is needed in the field of human services because human behavior actions and their meanings are not static. Overall, the four types of knowledge that is applied in the discipline of human services complements and is further reinforced by the characteristics of science. Its being a science does not contradict knowledge acquisition, rather, it strengthens the field in terms of dynamicity, accurateness and precision in gathering information and data. References Hutchison, Elizabeth. (2003). Dimensions of Human Behaviour: Person and Environment. UK: Sage Publications. Walsh, Mark and Lynne Wigens. (2003). Introduction to Research. UK: Nelson Thornes.

Success And Failure Of Im Management - 1385 Words

Success and Failure in IM management 1 IM PROFESSIONAL PROFILE After graduating from Syracuse University, I aspire to become a Project Manager. I have chosen this particular professional profile since I have a work-ex of almost 3.7 years of IT behind me that helped me to understand how project management works. I was fascinated with the team dynamics that take place and leading a team of 4 people in my work place honed my technical skills as well. I am confident that I will be able to take charge of a project and guide it well – from the requirements gathering phase till the final testing stage. PRACTICES CAUSING SUCCESS IN IM LEADERSHIP 1. A proper firm strategy – A firm strategy represents the manner in which the organization tends†¦show more content†¦Celebrate their positive points and achievements and let them know where improvement is required. But, don’t let the feedback be anonymous. That leads to confusion and resentment. The best way is to provide open face-to-face feedback. 4. Putting the Infrastructure in place - When it comes to making information systems decisions, it is also important to consider the current IT infrastructure of the firm. The existing IT infrastructure, defined as the technological backbone of the firm, constrains and enables opportunities for future information systems implementations. Hence, timely updates should be made to the infrastructure. 5. Identifying and managing Organizational change - As a general or functional manager, one must pay close attention to organizational change. With the widespread adoption of IT by modern organizations, increasingly this organizational change is brought on by the introduction of new IT. The definition of information systems as sociotechnical systems is instrumental in helping you better manage organizational change. Specifically, we can identify three levels of organizational change brought about by the introduction of a new IT. First order change or the automate, second order change or the informate and third order change or the transform. 6. Developing a feasible IS plan - Business firms achieve their best results when a clear strategy and clear goals have been identified and lead to