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Compute return on equity (ROE).

Compute return on equity (ROE).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL. Numerator Denominator FL + 0 c. Calculate the profitability (profit margin, PM) and productivity (asset turnover, AT) components of ROA. Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM. Numerator Denominator PM Note: 1. Select the appropriate numerator and denominator used to compute AT from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AT. Numerator Denominator AT 0% ← Previous 0 + d. Confirm the ROE from part a. above with the full DuPont disaggregation: ROE = PM * ATX FL PM AT 0 ***ROE may be different from part a. due to rounding Check Save Answers FL A ÷ 0 0 ROE
Transcribed Image Text:Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL. Numerator Denominator FL + 0 c. Calculate the profitability (profit margin, PM) and productivity (asset turnover, AT) components of ROA. Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM. Numerator Denominator PM Note: 1. Select the appropriate numerator and denominator used to compute AT from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AT. Numerator Denominator AT 0% ← Previous 0 + d. Confirm the ROE from part a. above with the full DuPont disaggregation: ROE = PM * ATX FL PM AT 0 ***ROE may be different from part a. due to rounding Check Save Answers FL A ÷ 0 0 ROE
Disaggregate Traditional DuPont ROE Graphical representations of the KLA-Tencor 2018 income statement and average balance sheet numbers (2017-2018) follow ($ thousands). KLA-Tencor Average Balance Sheet 2017-2018 $1,473,464 O $2,583,930 -$2,627,235.5 $1,518,3711 Operating assets Nonoperating assets Operating labilities Nonoperating Babies Equity + 0 수 $2.948.529 0 KLA-Tencor Income Statement 2018 $802,265 $653.666- ✪ 0 O $81,263 a. Compute return on equity (ROE). 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 ROE. Numerator Denominator ROE Operating expenses Tax expense 수 0 b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage (FL). 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 ROA. Numerator Denominator ROA 수 0 Interest expense, net Net Income # -$2,499,507 96 0 Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL. Numerator Denominator FL 96 c. Calculate the profitability (profit margin, PM) and productivity (asset turnover, AT) components of ROA. Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM. Numerator Denominator PM
Transcribed Image Text:Disaggregate Traditional DuPont ROE Graphical representations of the KLA-Tencor 2018 income statement and average balance sheet numbers (2017-2018) follow ($ thousands). KLA-Tencor Average Balance Sheet 2017-2018 $1,473,464 O $2,583,930 -$2,627,235.5 $1,518,3711 Operating assets Nonoperating assets Operating labilities Nonoperating Babies Equity + 0 수 $2.948.529 0 KLA-Tencor Income Statement 2018 $802,265 $653.666- ✪ 0 O $81,263 a. Compute return on equity (ROE). 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 ROE. Numerator Denominator ROE Operating expenses Tax expense 수 0 b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage (FL). 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 ROA. Numerator Denominator ROA 수 0 Interest expense, net Net Income # -$2,499,507 96 0 Note: 1. Select the appropriate numerator and denominator used to compute FL from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute FL. Numerator Denominator FL 96 c. Calculate the profitability (profit margin, PM) and productivity (asset turnover, AT) components of ROA. Note: 1. Select the appropriate numerator and denominator used to compute PM from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute PM. Numerator Denominator PM
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