NISM Series XV case set 2

Orbit Industries reports net profit of ₹60 crore and sales of ₹1,200 crore for the year. Average total assets are ₹600 crore and average ordinary shareholders’ equity is ₹300 crore. Use averages for both balance-sheet denominators and assume all profit belongs to ordinary shareholders. A comparator earns the same net margin and asset turnover but uses an equity multiplier of 1.5 rather than Orbit’s multiplier. The analyst uses the three-part DuPont identity: net margin × asset turnover × equity multiplier. There are no exceptional profits, minority interests or changes in accounting definitions between the two companies.

All people, firms, prices and contract terms are fictional.

Ignore taxes and transaction costs unless the case explicitly includes them.