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Comparative Analysis: Common size and Dupont Formula

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Complete a DuPont analysis for CostCo and Kroger for 2012, showing ROE, ROA, the profit margin, total asset turnover and equity multiplier. Discuss the differences between the two corporations.

Compute a common-size analysis in Excel and discuss the differences between the two corporations.

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Solution Summary

Your tutorial is 280 words and includes a spreadsheet analysis of DuPont formula and a vertical analysis of the income statement for 2012 for both CostCo and Kroger.

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CostCo and Kroger.
www.costco.com
www.kroger.com

See computations and financial statistics in Excel, attached.

Part I

Kroger beats CostCo in terms of gross margin, the ability to price products above cost. Kroger's 20.56% is almost double CostCo's 12.42%. However, in the other profitability measures, CostCo is very close to Kroger's results. For instance, the net profit margin of 1.55% and 1.72% are very comparable and so are the return on assets of 6.07% and 6.30%, with CostCo edging ...

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