Questions You are the head of the strategic management department ...

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Questions You are the head of the strategic management department of a company that manufactures steel. You are in the process of updating the company's strategic growth plan. The level of competition in the industry has increased significantly and you expect the trend to continue. Your company must take into account the effect of the increased competition on its performance. Aluminium, Copper, Iron, Lead, and Mercury are other companies in the steel industry. Use the following information from these companies to assist you in making a presentation to the board. Cost of equity (Re) 10% Excerpt from income statement Aluminium Copper Iron Lead Mercury Sales $68,679 $20,252 $56,620 $34,616 $20,414 EBIT $5,287 $1,914 $4,262 $2,321 $2,653 Net income $4,575 $1,381 $2,776 $1,411 $2,717 Excerpt from balance sheet Aluminium Copper Iron Lead Mercury Total assets $85,297 $15,841 $73,768 $41,978 $32,192 Total debt $44,442 $6,757 $29,461 $23,096 $22,706 Total equity $40,855 $9,085 $44,307 $18,882 $9,486 Based on this information, answer the following questions in the corresponding answer tabs in this sheet. Question 1 Use the following metrics to calculate the performance of the steel industry: 1. Economic income 2. Asset turnover 3. Leverage 4. Profit margin 5. Return on equity Question 2 Calculate the median ROE for the steel industry and assess the level of competition compared to the automotive industry, whose median is 9%.

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