Apply DuPont Disaggregation of ROE Selected balance sheet and income statement information for Facebook Inc. follows. $ millions Dec. 31, 2018 Dec. 31, 2017 Total assets $98,899 $86,089 Total liabilities 14,772 11,742 Sales 57,403 Net income 23,677 a. Compute ROE and disaggregate the ratio into its DuPont components of ROA and financial leverage. Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 ROE. Numerator Denominator ROE Answer Answer Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 ROA. Numerator Denominator ROA Answer Answer Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute Financial Leverage from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Financial Leverage. Numerator Denominator Financial Leverage Answer Answer Answer Answer b. Disaggregate ROA into Profit Margin and Asset Turnover components. Note: 1. Select the appropriate numerator and denominator used to compute Profit Margin from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Profit Margin. Numerator Denominator Profit Margin Answer Answer Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute Asset Turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Asset Turnover. Numerator Denominator Asset Turnover Answer Answer Answer Answer
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Apply DuPont Disaggregation of ROE
Selected
| $ millions | Dec. 31, 2018 | Dec. 31, 2017 |
|---|---|---|
| Total assets | $98,899 | $86,089 |
| Total liabilities | 14,772 | 11,742 |
| Sales | 57,403 | |
| Net income | 23,677 |
a. Compute ROE and disaggregate the ratio into its DuPont components of ROA and financial leverage.
Note: 1. Select the appropriate numerator and denominator used to compute ROE from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 ROE.
| Numerator | Denominator | ROE | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 ROA.
| Numerator | Denominator | ROA | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
Note: 1. Select the appropriate numerator and denominator used to compute Financial Leverage from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Financial Leverage.
| Numerator | Denominator | Financial Leverage | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
b. Disaggregate ROA into Profit Margin and Asset Turnover components.
Note: 1. Select the appropriate numerator and denominator used to compute Profit Margin from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Profit Margin.
| Numerator | Denominator | Profit Margin | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
Note: 1. Select the appropriate numerator and denominator used to compute Asset Turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Asset Turnover.
| Numerator | Denominator | Asset Turnover | |
|---|---|---|---|
| Answer | Answer | ||
| Answer | Answer |
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