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Problem:

While the industry average ROE is about 15%, average profit margin of 50%, asset efficiency of 10%, and leverage ratio of 3, the ROE for ABC, Inc., using data from January 2011, was 8.00% on an average shareholder's equity of $25,000,000. Revenue last year for ABC was $6,000,000 using $80,000,000 in assets. Your boss, the CIO, has asked you to prepare some ideas to present at the next Strategy Assessment.

Required:

Based on your understanding of the DuPont Formula, what observations/recommendation could you make to management about the existing business model?

Solve the numerical problem and show all work.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91148195

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