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 -$2,948,529 $1,518,371 ■ Operating assets Nonoperating assets Operating liabilities Nonoperating liabilities ■ Equity KLA-Tencor Income Statement 2018. $802,265 $653,666- $81,263 Operating expenses Tax expense -$2,499,507 Interest expense, net Net income

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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
FL
$2,583,930-
AT
KLA-Tencor
Income Statement 2018
$802,265
-$2,627.235.5
O-O
$653,666-
- $2.948.529
$1,518,371
■ Operating assets Nonoperating assets Operating liabilities
Nonoperating liabilities ■ Equity
$81,263
a. Compute return on equity (ROE).
Round answer to two decimal places (ex: 0.12345 = 12.35%)
ROE
%
Operating expenses Interest expense, net
Tax expense
Net income
b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage.
Round answers to two decimal places (ex: 0.12345= 12.35%)
ROA
%
-$2,499,507
c. Calculate the profitability and productivity components of ROA.
Round profit margin (PM) to two decimal places (ex: 0.12345 = 12.35%)
Round asset turnover (AT) to three decimal places.
PM
%
d. Confirm the ROE from part a. above with the full DuPont disaggregation: ROE = PM X ATX FL.
Round answer to two decimal places (ex: 0.12345= 12.35%)
%
Transcribed Image Text:Disaggregate Traditional DuPont ROE Graphical representations of the KLA-Tencor 2018 income statement and average balance sheet numbers (2017-2018) follow ($ thousands). KLA-Tencor Average Balance Sheet 2017-2018 $1,473,464 FL $2,583,930- AT KLA-Tencor Income Statement 2018 $802,265 -$2,627.235.5 O-O $653,666- - $2.948.529 $1,518,371 ■ Operating assets Nonoperating assets Operating liabilities Nonoperating liabilities ■ Equity $81,263 a. Compute return on equity (ROE). Round answer to two decimal places (ex: 0.12345 = 12.35%) ROE % Operating expenses Interest expense, net Tax expense Net income b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage. Round answers to two decimal places (ex: 0.12345= 12.35%) ROA % -$2,499,507 c. Calculate the profitability and productivity components of ROA. Round profit margin (PM) to two decimal places (ex: 0.12345 = 12.35%) Round asset turnover (AT) to three decimal places. PM % d. Confirm the ROE from part a. above with the full DuPont disaggregation: ROE = PM X ATX FL. Round answer to two decimal places (ex: 0.12345= 12.35%) %
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