Part A: Ratio Analysis

Attached are the financial statements for Smith Company, Inc. Use the financial statements to answer the questions below

Calculate and interpret the return on assets using the Dupont Method for the four years of data.

Calculate and interpret the return on equity using the Modified Dupont Method all four years of data.

Information for calculating the ROA and ROE using the Dupont Method for three competitors to Smith Company, Inc. is also provided below. You will use this information in Part D.

Part B: Stock Valuation

Use the information provided to calculate the required rate of return on four stocks. Use both CAPM and the Dividend Discount Model. The market return is expected to be 8.5% and the risk-free rate is 2.0%.

Table provided

Part C: Dividend Policy

Use the information provided to discuss the dividend policy of the four listed firms over the past four years.

Part D: Analysis

You are working as a financial analyst. Your manager has asked you to prepare a presentation on whether Smith Company, Inc. is a good investment opportunity. Prepare a presentation, a minimum of one slide for each part, summarizing your results.