Compute return on equity (ROE).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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FL
A
÷
0
0
ROE

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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