Computing Return on Equity and Return on AssetsThe following table reports financial statement information for Meta (Facebook's parent company).$ millions Total Assets Net Income Sales EquityFY3FY2$185,727$165,987$23,200 $116,609 $125,713$39,370 $117,929 $124,879FY1$159,316$26,146 $85,965 $128,290Requireda. Compute the following ratios for the two most recent years. NOTE: Round any intermediate calculations to the nearest whole dollar amount.Numerator Denominator ResultRatiosReturn on equity (ROE)FY3FY2Return on assets (ROA)FY3FY2Profit margin (PM)FY3FY2Asset turnover (AT)FY3FY2$$%%$$%%$$%%$b. Which of the following best explains the change in ROA during FY3?÷

Step 1: Calculate ROE for FY3 and FY2 ROE=EquityNetIncome ROEFY3=12571323200 = 0.1845= 18.45 %…

Answered: Computing Return on Equity and Return…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.4: Analyzing Financial Statements Using Financial Ratios

Problem 1WT

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Computing Return on Equity and Return on Assets The following table reports financial statement information for Meta (Facebook's parent company). $ millions Total Assets Net Income Sales Equity FY3 FY2 $482,890 $431,566 $60,320 $303,183 $326,854 $102,362 $306,615 $324,685 FY1 $414,222 $67,980 $223,509 $333,554 Required a. Compute the following ratios for the two most recent years. NOTE: Round any intermediate calculations to the nearest whole dollar amount. Ratios Numerator Denominator Return on equity (ROE) Result FY3 FY2 Return on assets (ROA) FY3 FY2 Profit margin (PM) FY3 FY2 Asset turnover (AT) FY3 FY2 $ $ 96 96 $ $ 96 96 $ $ 96 96 b. Which of the following best explains the change in ROA during FY3? Check
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