For the return on equity (ROE) and return on assets (ROA) ratios, perform a DuPont decomposition and analyze the components of the ratios in both years. Comment on which components of the ROE and ROA ratios ar
For the return on equity (ROE) and return on assets (ROA) ratios, perform a DuPont decomposition and analyze the components of the ratios in both years. Comment on which components of the ROE and ROA ratios ar
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
For the return on equity (ROE) and return on assets (ROA) ratios, perform a DuPont decomposition and
analyze the components of the ratios in both years. Comment on which components of the ROE and ROA
ratios are driving the changes in the ratios you observe.
Here is my ROE for years 2021 (1728.1 / 11,951.5= 14.5%) and 2020 (1066.8 / 9759.1= 11.3%)
Here is my ROA for 2021 (1728.1 / 13,555) * 100 = 12.7488% and 2020 (1066.8 / 11,168.9) * 100 = 9.5515%
Transcribed Image Text:Revenue:
Product
Service
Total revenue
Cost of revenue:
Product
Service
Total cost of revenue
Gross profit
Operating expenses:
Selling, general and administrative
Research and development
Total operating expenses
Income from operations
Interest and other income, net
Income before taxes
Income tax expense
Net income
Less: net income attributable to noncontrolling interest in joint venture
Net income attributable to Intuitive Surgical, Inc.
Net income per share attributable to Intuitive Surgical, Inc.:
Basic
Diluted
Shares used in computing net income per share attributable to Intuitive Surgical, Inc.:
Basic
Diluted
Total comprehensive income attributable to Intuitive Surgical, Inc.
S
S
$
$
S
2021
4,793.9 S
916.2
5,710.1
1,464.1
287.5
1,751.6
3,958.5
1,466.5
671.0
2,137.5
1,821.0
69.3
1,890.3
162.2
1,728.1
23.5
1,704.6 S
4.79 S
4.66 $
356.1
365.8
1,655.5 S
Years Ended December 31,
2020
3,634.6 S
723.8
4,358.4
1,230.3
266.9
1,497.2
2,861.2
1,216.3
595.1
1,811.4
1,049.8
157.2
1,207.0
140.2
1,066.8
6.2
1,060.6 S
3.02
S
2.94 S
351.1
361.0
1,073.1
S
2019
3,754.3
724.2
4,478.5
1,119.1
249.2
1,368.3
3,110.2
1,178.4
557.3
1,735.7
1,374.5
127.7
1,502.2
120.4
1,381.8
2.5
1,379.3
3.98
3.85
346.2
个
1,405.0
Transcribed Image Text:ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable, net of allowances of $20.2 and $17.7 as of
December 31, 2021, and 2020, respectively
Inventory
Prepaids and other current assets
Total current assets
Property, plant, and equipment, net
Long-term investments
Deferred tax assets
Intangible and other assets, net
Goodwill
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
Accrued compensation and employee benefits
Deferred revenue
Other accrued liabilities
Total current liabilities
Other long-term liabilities
Total liabilities
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, 2.5 shares authorized, $0.001 par value, issuable
in series; no shares issued and outstanding as of December 31,
2021, and 2020
Common stock, 600.0 shares authorized, $0.001 par
value, 357.7 shares and 353.1 shares issued and outstanding as of
December 31, 2021, and 2020, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Total Intuitive Surgical, Inc. stockholders' equity
Noncontrolling interest in joint venture
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
2021
December 31,
1,290.90
10%
2,913.1 21%
782.7
6%
587.1
4%
271.1
2%
5,844.9 43%
1,876.4 14%
4,415.5 33%
441.4
3%
633.2
5%
343.6 3%
13,555 100%
121.20
350.1 3%
377.2
3%
301.3
2%
1,149.8
453.7
1,603.5
1% $
8%
3%
12%
11,901.1
0%
0.4
0%
7,164.0
53%
4,760.9 35%
(24.2) 0%
88%
50.4 0%
11,951.5 88%
$ 13,555.0 100%
$
2021
1,622.6
3,488.8
645.5
601.5
267.5
6,625.9
6%
5%
2%
59%
1,577.3
14%
1,757.7 13%
367.7 3%
503.6
4%
336.7 2%
11,168.9 100%
81.6
235.0
350.30
298.3
965.2
444.6
1,409.8
15%
31%
1%
2%
3%
2%
9,731.5
9%
3%
13%
0%
0.4
0%
6444.9 48%
3261.3
24.9
29%
0%
87%
27.6 0%
9,759.1 87%
11,168.9 100%
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