3 step DuPont Return on Equity (ROE) analysis

2M2_Project_Excel_Class.xlsx

IS

Schedule One
Brady Corporation
Income Statements (000's/$)				Common-size				Common-base year
							Trend				Trend
	2014	2015	2016	2014	2015	2016		2014	2015	2016
	$	$	$
Revenue	18,675	28,675	48,845	100.00%	100.00%	100.00%		100.00%	153.55%	170.34%
Cost of Goods Sold	15,932	24,393	42,007	85.31%	85.07%	86.00%		100.00%	153.11%	172.21%
Gross Profit	2,743	4,282	6,838	14.69%	14.93%	14.00%		100.00%	156.11%	159.69%
Operating Expenses
Selling	1,251	1,851	2,734	6.70%	6.46%	5.60%		100.00%	147.96%	147.70%
General & Administrative	1,090	1,590	2,192	5.84%	5.54%	4.49%		100.00%	145.87%	137.86%
Total Operating Expenses	2,341	3,441	4,926	12.54%	12.00%	10.08%		100.00%	146.99%	143.16%
Operating Profit	402	841	1,912	2.15%	2.93%	3.91%		100.00%	209.20%	227.35%
Interest Expense	210	510	1,059	1.12%	1.78%	2.17%		100.00%	242.86%	207.65%
Earnings Before Taxes	192	331	853	1.03%	1.15%	1.75%		100.00%	172.40%	257.70%
Taxes	67	116	299	0.36%	0.40%	0.61%		100.00%	173.13%	257.76%
Earnings After Taxes	125	215	554	0.67%	0.75%	1.13%		100.00%	172.00%	257.67%

	One of the main trends in the common size of the Income statement is constant reveune from 2014-2016. But the gross profit had a slight decrease in 2016 at 14 percent. The total operating expenses have decrease and the operating profit had a major increase from 841 to 1912 almost 2 percent increase.
3 Step DuPont ROE Analysis

Brady Corporation
Balance Sheets (000's/$)				Common-size				Common-base year
							Trend				Trend
	2014	2015	2016	2014	2015	2016		2014	2015	2016
	$	$	$
Current Assets
Cash	25	20	10	0.29%	0.17%	0.05%		100.00%	80.00%	50.00%
Receivables	1,712	3,412	6,454	19.79%	28.76%	33.55%		100.00%	199.30%	189.16%
Inventory	1,582	2,958	6,490	18.29%	24.94%	33.73%		100.00%	186.98%	219.41%
Total current assets	3,319	6,390	12,954	38.37%	53.87%	67.33%		100.00%	192.53%	202.72%
Fixed Assets
Land	590	590	590	6.82%	4.97%	3.07%		100.00%	100.00%	100.00%
Net plant, property & equipment	4,740	4,882	5,695	54.80%	41.16%	29.60%		100.00%	103.00%	116.65%
Total fixed assets	5,330	5,472	6,285	61.63%	46.13%	32.67%		100.00%	102.66%	114.86%
Total Assets	8,649	11,862	19,239	100.00%	100.00%	100.00%		100.00%	137.15%	162.19%
Current liabilities
Account payables	1,019	2,019	4,656	11.78%	17.02%	24.20%		100.00%	198.14%	230.61%
Short-term notes payables	300	1,300	2,500	3.47%	10.96%	12.99%		100.00%	433.33%	192.31%
Total current liabilities	1,319	3,319	7,156	15.25%	27.98%	37.20%		100.00%	251.63%	215.61%
Long-term liabilities	2,300	3,330	6,355	26.59%	28.07%	33.03%		100.00%	144.78%	190.84%
Total liabilities	3,619	6,649	13,511	41.84%	56.05%	70.23%		100.00%	183.72%	203.20%
Shareholders' equity
Common stock	4,500	4,500	4,500	52.03%	37.94%	23.39%		100.00%	100.00%	100.00%
Retained earnings	218	433	987	2.52%	3.65%	5.13%		100.00%	198.62%	227.94%
Total equity	4,718	4,933	5,487	54.55%	41.59%	28.52%		100.00%	104.56%	111.23%
Total liabilities & equity	8,649	11,862	19,239	100.00%	100.00%	100.00%		100.00%	137.15%	162.19%
	Some of the main trend on the balance sheet were constant total assets and a increase of total liability and equity.