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4#
发表于 2011-7-11 20:07
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This was exactly what I was gonna ask regarding this question.
For those without the book handy.
Practice Exam Vol 2 Exam 2, Morning
Question 26
Using the Data found in Exhibit 1 and the extended dupont equation, which of the following best describes the impact on delicious's return on equity for 2009 of eliminating the investment in the us associate.
GIVEN: 2009 2008
Revenue 60,229 55,137
EBIT 7,990 7,077
EBT 7,570 6,779
Income
from
Associate 354 270
NI 6,501 5,625
Balance Sheet
Total Asset 56,396 53,111
Investment 5,504 5,193
from
Associate
Equity 30,371 29,595
Now the answer is adjusted ROE greater than unadjusted ROE. The answer uses the 5 part dupont model. NI/EBT x EBT/EBIT x EBIT/REV x REV/Avg Total Asset x Avg Total Asset/Equity.
NI/EBT: adjusted will be lower than unadjusted NI/EBT (b/c your taking out the income from associate, so lower NI)
Rev/Avg Total Asset: Adjusted is higher than unadjusted (b/c lower avg total asset due to taking out the investment in associate).
The higher adjusted asset turnover is greater than the decrease in the adjusted NI/EBT. And therefore adjusted ROE is higher than unadjusted ROE. But this is b/c they say that financial leverage is unchanged as the it doesn't give any info on how the investment is financed. However, doesn't total avg asset decrease in the adjusted financial leverage hence lower adjusted financial leverage?
The problem doesn't if they had controlling interest so assuming it is equity investment (30%)
Another question, is the denominator for the asset turnover -> Average total asset? and for financial leverage -> average equity? Or if on test we see statements for 2+ years, we would avg them? |
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