1 Find a company whose ticker symbol contains your initials

1) Find a company whose ticker symbol contains your initials. (For example if your initials are: BK, then Bank of New York Mellon (BK) or Barnes and Noble (BKS) or Ambac Financial Group (ABK) would satisfy this requirement). If you cannot find any company with your initials, then use one of your initials (you choose which) twice. So if your initial are: SV, choose a company with either 2 S’s or 2 V’s in the ticker. If there is still no suitable company, then choose any company contained in the Dow Jones Industrial Average. 2) Obtain the financial statements for the three most recent years. Usually, the financial statements are in the company’s annual report, and are on, or can be downloaded from the company’s website, or 3) For the three most recent years, analyze the Du Pont identity for your chosen company. How has ROE changed over this period? How have changes in each component of the Du Pont identity affected ROE over this period? 4) Choose two competitors of the company you chose in parts 1,2 and 3. Analyze the Du Pont identity for the competitors (over the most recent three years). How does your company’s profitability compare to the two competitors? What conclusion, if any, can you make about the condition of your chosen company?

I chose Agilent Technologies but I couldnt post their financial statement here, please go to https://www.agilent.com/about/newsroom/presrel/2017/20nov-gp17023_print.html

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AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
		Three Months Ended
		October 31,		Percent
		2017		2016		Inc/(Dec)
Net revenue		$	1,189			$	1,111			7	%
Costs and expenses:
Cost of products and services			542				523			4	%
Research and development			89				84			6	%
Selling, general and administrative			325				321			1	%
Total costs and expenses			956				928			3	%
Income from operations			233				183			27	%
Interest income			7				3			133	%
Interest expense			(20	)			(19	)		5	%
Other income (expense), net			6				(16	)		—
Income before taxes			226				151			50	%
Provision for income taxes			49				25			96	%
Net income		$	177			$	126			40	%
Net income per share:
Basic		$	0.55			$	0.39
Diluted		$	0.54			$	0.38
Weighted average shares used in computing net income per share:
Basic			322				324
Diluted			326				328
Cash dividends declared per common share		$	0.132			$	0.115

Solution

As per DuPont Equation, Return on Equity can be broken down into the following ratios for exact-analysis purposes. ie. ROE=Profit Margin*Total Assets Turnover*Financial Leverage (or equity multiplier) ie. ROE=(Net Income/Sales)*(Sales/Total assets)*(Total assets/Equity) Accordingly, following details are collected & analysed. Figures in Millions Agilent Technologies Inc. Thermo Fisher Scientific Inc Danaher Corp Oct.2015 Oct.2016 Oct.2017 Dec-14 Dec. 2015 Dec,2016 Dec-14 Dec-15 Dec-16 Net Income 401 462 684 1,894 1,975 2,022 2,598 3,357 2,554 Sales/ Revenues 4038 4202 4472 16,890 16,965 18,274 19,914 20,563 16,882 Profit Margin 9.93% 10.99% 15.30% 11.21% 11.64% 11.06% 13.05% 16.33% 15.13% Total Assets 7479 7802 8406 42,852 40,889 45,908 36,992 48,222 45,295 Total Assets Turnover 0.54 0.54 0.53 0.39 0.41 0.40 0.54 0.43 0.37 Total equity 4167 4243 4831 20,548 21,350 21,539 23,378 23,690 23,003 Financial leverage 1.79 1.84 1.74 2.09 1.92 2.13 1.58 2.04 1.97 ROE= 9.62% 10.89% 14.16% 9.22% 9.25% 9.39% 11.11% 14.17% 11.10% PM*TATO*FL Analysis of DuPont equation Agilent Technologies Inc. Increasing profit margin over the 3 years $ sales generated per $ of assets employed remains the same at half over all the years Employs lesser amount of debt in funding assets than equity in all the 3 years Increasing ROE over the 3 years Thermo Fisher Scientific Inc Maintains almost same level of profit margin over the 3 years $ sales generated per $ of assets employed also remains almost the same over all the years Employs almost equal amount of debt in funding assets as equity in all the 3 years Maintains almost same level of ROE over the 3 years Danaher Corp Increasing profit margin over the 3 years $ sales generated per $ of assets employed has decreased over the 3 years Increased amount of debt in funding assets than equity over the 3 years ROE is maximum in 2015 & same in the other 2 yrs. Comparison Of Agilent Technologies Inc. with competitors Profit margin is continuously improving , despite increase in sales revenues--which denotes good cost control. Asset utilisation ($ sales generated )is better & consistent ,when compared to both the competitors. More of Equity-funding of the total assets is prominent when compared to the other 2 which have more proportion of debt in their capital structures. ROE is continuously improving ,despite increase in equity & sales revenues --which indicates   improving profit margin(& better cost control)--- much better than Thermo Fisher & Danaher Corp, the latter being a little inconsistent.