Duport Analysis: the Number Game

DuPont Analysis: Playing The Numbers Game! The synopsis of this case is that a recently joined CFO of an organization, Plastichem Inc. , had the option to turn the company’s appalling circumstance around when he previously showed up. However, after five years, Plastichem has experienced some troublesome occasions including their stock value/evaluations seriously dropping with no understanding regarding why. The case closes with the CFO endeavoring to make sense of what turned out badly with the numbers he was given. To decide the liquidity, we utilized the fast proportion, current proportion, and intrigue inclusion ratio.From these conditions, the higher the proportions implied the better of the company’s monetary condition, or greater liquidity. The satisfactory proportions fluctuate from various ventures. All in all, company’s fast proportion ought to be 1 or higher, and its present proportion ought to be over 1. 5 to be viewed as fluid. In the correlation betw een two companies’ proportions, DCM Molding has demonstrated a superior budgetary condition on normal in the previous four years, and Plastichem has scarcely met the satisfactory normal or is underneath the normal in the previous four years. Brisk Ratio = (Cash and attractive protections + A/R + Other Current Asset)/Current Liabilities | Year| 2004| 2003| 2002| 2001| Plastichem| 0. 86| 1. 141| 1. 039| 0. 826| DCM Molding| 0. 99| 0. 93| 1. 114| 1. 568| | Year| | 2004| 2003| 2002| 2001| Plastichem| 1. 301| 1. 523| 1. 462| 1. 309| DCM Molding| 1. 632| 1. 518| 1. 826| 2. 095| | Year| | 2004| 2003| 2002| 2001| Plastichem| 0. 763| 1. 9113| 1. 962| 2. 442| DCM Molding| 4. 667| 1. 217| 4. 217| 8. 6| To gauge the influence, we determined the obligation value proportion. Plastichem had a generally high Debt-Equity Ratio, which demonstrated that Plastichem was utilizing numerous obligations to back its growth.High Debt-Equity Ratio additionally showed that Plastichem bore more hazard in light of the fact that the expense of obligation (intrigue). The organization would make more benefit if the gradual benefit surpasses the steady expense of obligation; notwithstanding, the organization may lose more cash/get less cash-flow if the steady benefit is not exactly the steady expense of obligation. | Year| | 2004| 2003| 2002| 2001| Plastichem| - 19. 331| 5. 076| 4. 862| 1. 355| DCM Molding| 1. 192| 1. 477| 1. 274| 0. 714| To decide the productivity, we ascertain the Profit Margin, ROE, and ROA. By taking a gander at the proportions, Plastichem’s benefit has dropped in the previous four years.The high influence may have amplified the loss of the organization. Then again, DCM Molding has demonstrated a consistent pay/benefit throughout the years. | Year| | 2004| 2003| 2002| 2001| Plastichem| - 24. 14%| 0. 68%| 3. 45%| 5. 65%| DCM Molding| 5. 91%| 6. 19%| 5. 37%| 5. 09%| | Year| | 2004| 2003| 2002| 2001| Plastichem| ? | 3. 53%| 6. 38%| 17. 30%| DCM Molding| 17. 76%| 18. 64%| 17. 44%| 10. 95%| | Year| | 2004| 2003| 2002| 2001| Plastichem| - 26. 90%| 0. 58%| 1. 09%| 7. 34%| DCM Molding| 8. 10%| 7. 53%| 7. 66%| 6. 39%| A typical size accounting report is an alternate sort of monetary record that hows every dollar sum in a type of level of a typical number from the genuine asset report. Normal size monetary record is helpful in looking at organizations that have an alternate size of activities. This sort of asset report helps in seeing at the organizations as a typical measured and it additionally helps in looking at the progressions in different portions over some stretch of time. PLASTICHEM INCORPORATED| | Annual Income Statements (Value in Millions)| | 2004| 2003| 2002| 2001| Sales| 100. 00%| 100. 00%| 100. 00%| 100. 00%| Cost of Sales| 74. 81%| 62. 76%| 63. 39%| 65. 04%| Gross Operating profit| 25. 19%| 37. 24%| 36. 61%| 34. 6%| Selling, General and Admin. Expenses| 13. 27%| 18. 54%| 18. 66%| 20. 73%| EBITDA| 11. 92%| 18. 71%| 17. 95%| 14. 23% | Depreciation and Amortization| 6. 16%| 5. 51%| 5. 82%| 4. 41%| EBIT| 5. 76%| 13. 20%| 12. 12%| 9. 82%| Other Income, Net| - 0. 17%| 0. 20%| 0. 12%| 0. 08%| Total Income Avail for Interest Exp. | 5. 59%| 13. 40%| 12. 24%| 9. 90%| Interest Expense| 7. 54%| 6. 90%| 6. 18%| 4. 02%| Minority Interest| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Pre-Tax Income| - 1. 95%| 6. 50%| 6. 06%| 5. 88%| Income Taxes| 0. 03%| 0. 71%| 2. 61%| 0. 23%| Special Income/Charges| - 22. 15%| - 5. 10%| 0. 00%| 0. 00%| Net Income from Cont.Operations| - 24. 14%| 0. 68%| 3. 45%| 5. 65%| Net Income from Discont. Opers. | 0. 00%| 0. 00%| 0. 00%| 0. 00%| Net Income from Total Operations| - 24. 14%| 0. 68%| 3. 45%| 5. 65%| Normalized Income| - 1. 99%| 5. 78%| 3. 49%| 5. 65%| Extraordinary Income| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Income from Cum. Eff. of Acct. Chg. | 0. 00%| 0. 00%| 0. 00%| 0. 00%| Income from Tax Loss Carryforward| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Other Gains| 0. 00%| 0. 00%| - 2. 02%| 0. 00%| Total Net Inco me| - 24. 14%| 0. 68%| 1. 43%| 5. 65%| PLASTICHEM INCORPORATED| | Annual Balance Sheets (Values in millions)| | 2004| 2003| 2002| 2001|ASSETS | Current Assets| | Cash and attractive securities| 1. 20%| 1. 40%| 1. 47%| 0. 60%| Accounts receivable| 17. 34%| 17. 33%| 14. 74%| 21. 03%| Inventory| 10. 31%| 7. 01%| 7. 44%| 12. 88%| Other Current assets| 1. 54%| 2. 21%| 2. 03%| 0. 40%| Total Current Assets| 30. 40%| 27. 94%| 25. 68%| 34. 91%| | Non-Current Assets| | Property, Plant and Equipment, Gross| 35. 44%| 28. 70%| 25. 85%| 47. 99%| Accumulated deterioration and Depletion| 14. 41%| 9. 13%| 8. 15%| 19. 42%| Property, Plant and Equipment, Net| 21. 03%| 19. 57%| 17. 71%| 28. 57%| Intangibles| 45. 67%| 50. 07%| 53. 53%| 33. 0%| Other Non-Current Assets| 2. 90%| 2. 41%| 3. 09%| 3. 52%| Total Non-Current Assets| 69. 60%| 72. 06%| 74. 32%| 65. 09%| Total Assets| 100. 00%| 100. 00%| 100. 00%| 100. 00%| | LIABILITIES AND EQUITIES| | Current Liabilities| | Accounts payable| 7. 71%| 6. 92%| 6. 03%| 9. 76%| Short Term Debt| 2. 48%| 1. 63%| 1. 03%| 3. 92%| Other current Liabilities| 13. 17%| 9. 80%| 10. 50%| 12. 98%| Total Current liabilities| 23. 36%| 18. 35%| 17. 56%| 26. 66%| | Non-Current liabilities| | Long-term debt| 80. 96%| 64. 35%| 65. 38%| 30. 89%| Deferred Income Taxes| 0. 00%| 0. 00%| 0. 00%| 0. 0%| Other Non-Current Liabilities| 1. 13%| 0. 84%| 0. 00%| 0. 00%| Minority Interest| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Total Non-Current Liabilities| 82. 09%| 65. 19%| 65. 38%| 30. 89%| Total Liabilities| 105. 46%| 83. 54%| 82. 94%| 57. 55%| | Shareholder's Equity| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Preferred Stock Equity| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Common Stock Equity| - 5. 46%| 16. 46%| 17. 06%| 42. 45%| Total equity| - 5. 46%| 16. 46%| 17. 06%| 42. 45%| | Total liabilities and Stock Equity| 100. 00%| 100. 00%| 340| 100. 00%| DCM MOLDING| | Annual Balance Sheets (Values in millions)| | 2004| 2003| 2002| 2001| ASSETS | Current Assets| | Cash and attractive securities| 0. 33%| 1. 25%| 0. 47%| 8. 06%| Accounts receivable| 19. 87%| 18. 36%| 20. 31%| 19. 44%| Inventory| 14. 32%| 13. 34%| 14. 69%| 10. 83%| Other Current assets| 1. 89%| 1. 48%| 2. 19%| 4. 72%| Total Current Assets| 36. 40%| 34. 44%| 37. 66%| 43. 06%| | Non-Current Assets| | Property, Plant ; Equipment, Gross| 47. 28%| 42. 08%| 43. 44%| 56. 39%| Accumulated deterioration ; Depletion| 17. 20%| 12. 66%| 11. 09%| 10. 83%| Property, Plant ; Equipment, Net| 30. 08%| 29. 42%| 32. 34%| 45. 56%| Intangibles| 33. 0%| 35. 46%| 28. 44%| 5. 28%| Other Non-Current Assets| 0. 22%| 0. 68%| 1. 56%| 6. 11%| Total Non-Current Assets| 63. 60%| 65. 56%| 62. 34%| 56. 94%| Total Assets| 100. 00%| 100. 00%| 100. 00%| 100. 00%| | LIABILITIES AND EQUITIES| | Current Liabilities| | Accounts payable| 7. 66%| 8. 10%| 8. 28%| 5. 56%| Short Term Debt| 7. 44%| 6. 61%| 4. 22%| 7. 50%| Other current Liabilities| 7. 21%| 8. 10%| 8. 28%| 7. 50%| Total Current liabilities| 22. 31%| 22. 69%| 20. 63%| 20. 56%| | Non-Current liabilities| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Long-term debt| 28. 63%| 31. 93%| 29. 22%| 15. 00%|Deffered Income Taxes| 0. 11%| 0. 57%| 0. 00%| 3. 89%| Other Non-Current Liabilities| 3. 33%| 4. 45%| 6. 09%| 2. 22%| Minority Interest| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Total Non-Current Liabilities| 32. 08%| 36. 94%| 35. 31%| 21. 11%| Total Liabilities| 54. 38%| 59. 64%| 55. 94%| 41. 67%| | Shareholder's Equity| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Preferred Stock Equity| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Common Stock Equity| 45. 62%| 40. 36%| 43. 91%| 58. 33%| Total equity| 45. 62%| 40. 36%| 43. 91%| 58. 33%| | Total liabilities and Stock Equity| 100. 00%| 100. 00%| 100. 00%| 100. 00%| DCM MOLDING| | |Annual Income Statements (Value in Millions)| | 2004| 2003| 2002| 2001| Sales| 100. 00%| 100. 00%| 100. 00%| 100. 00%| Cost of Sales| 66. 83%| 64. 85%| 64. 76%| 62. 96%| Gross Operating profit| 33. 17%| 35. 15%| 35. 24%| 37. 04%| Selling, General and Admin. Expenses| 17. 23%| 18. 65%| 19. 60%| 2 2. 22%| EBITDA| 15. 94%| 16. 49%| 15. 64%| 14. 81%| Depreciation and Amortization| 4. 61%| 4. 40%| 4. 32%| 4. 86%| EBIT| 11. 33%| 12. 09%| 11. 32%| 9. 95%| Other Income, Net| 0. 00%| 0. 00%| - 0. 12%| - 0. 23%| Total Income Avail for Interest Exp. | 11. 33%| 12. 09%| 11. 20%| 9. 72%| Interest Expense| 2. 43%| 2. 16%| 2. 0%| 1. 16%| Minority Interest| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Pre-Tax Income| 8. 90%| 9. 93%| 9. 10%| 8. 56%| Income Taxes| 2. 99%| 3. 75%| 3. 73%| 3. 47%| Special Income/Charges| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Net Income from Cont. Operations| 5. 91%| 6. 19%| 5. 37%| 5. 09%| Net Income from Discont. Opers. | 0. 00%| 0. 00%| 0. 35%| 0. 00%| Net Income from Total Operations| 5. 91%| 6. 19%| 5. 72%| 5. 09%| Normalized Income| 5. 91%| 6. 19%| 5. 37%| 5. 09%| Extraordinary Income| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Income from Cum. Eff of Acct. Chg. | 0. 00%| 0. 00%| 0. 00%| 0. 00%| Income from Tax Loss Carryforward| 0. 0%| 0. 00%| 0. 00%| 0. 00%| Other Gains| 0. 00%| 0. 00%| 0. 00%| 0. 00%| Total Net Income| 5. 91%| 6. 19%| 5. 72%| 5. 09%| We can see that the expense of the deals has been expanding for