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TESCO CASE STUDY

Du Point Analysis=RoE=(Profit/Sales)*(Sales/Assets)*( Assets/Equity)

Profit/Sales Sales/Assets Assets/Equity Interest Coverage Ratio

1999 5.62 1.97 1.98 7.7

2000 5.54 1.90 2.06 7.1

2001 5.59 1.78 2.36 6.6

2002 5.60 1.74 2.45 6.2

Problems
Higher Borrowed funds Low operating profit over sales Asset heavy

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