Company B Consolidated Statement of Income (000) Year Ending May 31 1996 1997 1998 1999 2000…

Company B Consolidated Statement of Income (000) Year Ending May 31   1996 1997 1998 1999 2000               Revenues   $3,930,984 $3,789,668 $4,760,834 $6,470,625 $9,186,539               Cost and Expenses               Cost of sales $2,386,993 $2,301,423 $2,865,280 $3,906,746 $5,502,993   Selling & Administrative $922,261 $974,099 $1,209,760 $1,588,612 $2,303,704   Interest expense $25,739 $15,282 $24,208 $39,498 $52,343   Other income/expense $1,475 $8,270 $11,722 $36,679 $32,277     $3,336,468 $3,299,074 $4,110,970 $5,571,535 $7,891,317               Income before income taxes   $594,516 $490,594 $649,864 $899,090 $1,295,222               Income taxes   $229,500 $191,800 $250,200 $345,900 $499,400               Net income   $365,016 $298,794 $399,664 $553,190 $795,822               Company B Consolidatd Balance Sheets (000) Year Ending May 31+A2:G25   1996 1997 1998 1999 2000 Assets             Current Assets               Cash & equivalents $291,284 $518,816 $216,071 $262,117 $445,421   A/R $667,547 $703,682 $1,053,237 $1,346,125 $1,754,137   Inventory $592,986 $470,023 $629,742 $931,151 $1,338,640   Deferred income tax $26,378 $37,603 $72,657 $93,120 $135,663   Prepaid items $42,452 $40,307 $74,221 $94,427 $157,058   total current assets $1,620,647 $1,770,431 $2,045,928 $2,726,940 $3,830,919               Property, Plant and Equipment   $377,995 $405,845 $554,879 $643,459 $922,369 Goodwill   $157,894 $163,036 $495,907 $474,812 $464,191 Other assets   $30,927 $34,503 $46,031 $106,417 $143,728   Total assets $2,187,463 $2,373,815 $3,142,745 $3,951,628 $5,361,207               Liabilities and Stockholders' Equity             Current Liabilities               Current portion long term debt $52,985 $3,857 $31,943 $7,301 $2,216   Notes payable $108,165 $127,378 $397,100 $445,064 $553,153   Accounts payable $135,701 $210,576 $297,656 $455,034 $687,121   Accrued liabilities $138,563 $181,889 $345,224 $480,407 $570,504   Income tax payable $17,150 $38,287 $35,612 $79,253 $53,923   total current liabilities $452,564 $561,987 $1,107,535 $1,467,059 $1,866,917               Long term debt   $15,033 $12,364 $10,565 $9,584 $296,020 Non-current deferred income taxes   $29,965 $18,228 $17,789 $1,883   Other liabilities   $43,575 $39,987 $41,867 $41,402 $42,132 Redeemable preferred stock   $300 $300 $300 $300 $300 Stockholders' Equity               Common stock- A $159 $159 $155 $153 $152   Common stock- B $2,720 $2,704 $2,698 $2,702 $2,706   Capital in excess of stated value $108,451 $108,284 $122,436 $154,833 $210,650   Foreign currency adjustment ($7,790) ($15,123) $1,585 ($16,501) ($31,333)   Retained earnings $1,542,486 $1,644,925 $1,837,815 $2,290,213 $2,973,663   Shareholders' equity $1,646,026 $1,740,949 $1,964,689 $2,431,400 $3,155,838 Total Liabilities and Shareholders' Equity   $2,187,463 $2,373,815 $3,142,745 $3,951,628 $5,361,207 As an aid to Sylvia, a) calculate the ROE through the four parts Dupont formula for the five years, for the Company B.                         b) Briefly comment on the trend of each company’s total ROE and each of the four components.    

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