First Investment Inc.: Analysis of Financial Statements
Company Information
First Investments Inc owns stock of Basic Industries. Basic Industries is a diversified multinational corporation with major shares in various electrical related markets.
Financial Analysis
The financial analysis of the company is carried out using DuPont System of analysis.
DuPont Analysis [Ref:4]
There are two methods of DuPont Analysis, one is called three steps and other is called five steps DuPont Analysis.
Three Steps DuPont Calculation:
Step 1: Basic equation is very simple i.e.
ROE = net income / shareholders’ equity
Step 2: Taking ROE and multiplying the equation by (Sales/Sales), we get:
ROE = (net income / sales) * (sales / shareholder's equity)
ROE = net profit margin * equity turnover ratio
Step 3: Now by multiplying in (assets / assets), we end up with the three-step DuPont identity.
ROE = (net income / sales) * (sales / assets) * (assets / shareholder's equity)
This equation......

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Title: First Investment Inc.: Analysis Of Financial Statements
Approximate Word Count: 669
Approximate Pages: 3 (250 words per double-spaced page)

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