The company is General Dynamics Corporation (GD)
Evaluate Return on Equity for the company for the last three years using the DuPont analysis.
a. Taking the information from the Income statements and the Balance sheets, calculate the company’s net profit margin, total assets turnover equity multiplier, and return on equity using the DuPont formula for the company for three years.
Show your calculation! ROE = Net profit margin x Total assets turnover x Equity multiplier = Net income/Sales x Sales/Total assets x Total assets/Common equity
You can use Revenue instead of Sales.
b. Compare theses results to a main aerospace or industry competitor. For the major competitor you can use ratios from the Internet or calculate them for the last year. Write about an analysis of the results that you received. In your report please answer the question: If the management of General Dynamics Corporation would like to improve their return on equity, what should the management of these companies do?