4. Determine FLEV and Spread and the noncontrolling interest ratio (if applicable). Show that:[RNOA + (FLEV x Spread)] x Noncontrolling interest ratioROECompare the components of the equation for each company over time and follow up on any differences. AВDConsolidated Balance Sheet USD ($) $ in MillionsDec. 31, 20181increase or decrease %Current assets2$ 3,042Cash and cash equivalents30.88%Notes and accounts receivable, less estimated doubtful amounts24,70147.13%Inventories5Crude oil, products and merchandise14,80364.28%Materials and supplies4,15571.20%Other current assets1,2720.37%Total current assetsInvestments, advances and long-term receivables40,7901011.78%Property, plant and equipment, at cost, less accumulated depreciation and depletion247,1011171.38%10,332Other assets, including intangibles, net122.98%Total assets346,19613100.00%Current liabilities14Notes and loans payable17,258154.99%Accounts payable and accrued liabilities37,2681610.77%Income taxes payable2,612170.75%Total current liabilities18Long-term debt20,538195.93%Postretirement benefits reserves20,272205.86%Deferred income tax liabilities27,244217.87%Long-term obligations to equity companies4,382221.27%Other long-term obligations18,094235.23%Total liabilities147,6682442.65%Commitments and contingencies25Equity26Common stock without par value (9,000 million shares authorized, 8,019 million shares issued)15,258274.41%Earnings reinvested421,65328121.80%Accumulated other comprehensive income(19,564)29-5.65%(225,553)Common stock held in treasury (3,782 million shares in 2018 and 3,780 million shares in 2017)30-65.15%ExxonMobil share of equity31Noncontrolling interests6,734321.95%Total equity198,5283357.35%$ 346,196Total liabilities and equity34100.00%3536

Question
Asked Oct 2, 2019
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Determine flev and spread and the non controling interest ratio(in aplicable)

show:

ROE=[ROA+(FLEV X SPREAD)] X noncontroling interest ratio

4. Determine FLEV and Spread and the noncontrolling interest ratio (if applicable). Show that:
[RNOA + (FLEV x Spread)] x Noncontrolling interest ratio
ROE
Compare the components of the equation for each company over time and follow up on any differences.
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4. Determine FLEV and Spread and the noncontrolling interest ratio (if applicable). Show that: [RNOA + (FLEV x Spread)] x Noncontrolling interest ratio ROE Compare the components of the equation for each company over time and follow up on any differences.

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A
В
D
Consolidated Balance Sheet USD ($) $ in Millions
Dec. 31, 2018
1
increase or decrease %
Current assets
2
$ 3,042
Cash and cash equivalents
3
0.88%
Notes and accounts receivable, less estimated doubtful amounts
24,701
4
7.13%
Inventories
5
Crude oil, products and merchandise
14,803
6
4.28%
Materials and supplies
4,155
7
1.20%
Other current assets
1,272
0.37%
Total current assets
Investments, advances and long-term receivables
40,790
10
11.78%
Property, plant and equipment, at cost, less accumulated depreciation and depletion
247,101
11
71.38%
10,332
Other assets, including intangibles, net
12
2.98%
Total assets
346,196
13
100.00%
Current liabilities
14
Notes and loans payable
17,258
15
4.99%
Accounts payable and accrued liabilities
37,268
16
10.77%
Income taxes payable
2,612
17
0.75%
Total current liabilities
18
Long-term debt
20,538
19
5.93%
Postretirement benefits reserves
20,272
20
5.86%
Deferred income tax liabilities
27,244
21
7.87%
Long-term obligations to equity companies
4,382
22
1.27%
Other long-term obligations
18,094
23
5.23%
Total liabilities
147,668
24
42.65%
Commitments and contingencies
25
Equity
26
Common stock without par value (9,000 million shares authorized, 8,019 million shares issued)
15,258
27
4.41%
Earnings reinvested
421,653
28
121.80%
Accumulated other comprehensive income
(19,564)
29
-5.65%
(225,553)
Common stock held in treasury (3,782 million shares in 2018 and 3,780 million shares in 2017)
30
-65.15%
ExxonMobil share of equity
31
Noncontrolling interests
6,734
32
1.95%
Total equity
198,528
33
57.35%
$ 346,196
Total liabilities and equity
34
100.00%
35
36
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A В D Consolidated Balance Sheet USD ($) $ in Millions Dec. 31, 2018 1 increase or decrease % Current assets 2 $ 3,042 Cash and cash equivalents 3 0.88% Notes and accounts receivable, less estimated doubtful amounts 24,701 4 7.13% Inventories 5 Crude oil, products and merchandise 14,803 6 4.28% Materials and supplies 4,155 7 1.20% Other current assets 1,272 0.37% Total current assets Investments, advances and long-term receivables 40,790 10 11.78% Property, plant and equipment, at cost, less accumulated depreciation and depletion 247,101 11 71.38% 10,332 Other assets, including intangibles, net 12 2.98% Total assets 346,196 13 100.00% Current liabilities 14 Notes and loans payable 17,258 15 4.99% Accounts payable and accrued liabilities 37,268 16 10.77% Income taxes payable 2,612 17 0.75% Total current liabilities 18 Long-term debt 20,538 19 5.93% Postretirement benefits reserves 20,272 20 5.86% Deferred income tax liabilities 27,244 21 7.87% Long-term obligations to equity companies 4,382 22 1.27% Other long-term obligations 18,094 23 5.23% Total liabilities 147,668 24 42.65% Commitments and contingencies 25 Equity 26 Common stock without par value (9,000 million shares authorized, 8,019 million shares issued) 15,258 27 4.41% Earnings reinvested 421,653 28 121.80% Accumulated other comprehensive income (19,564) 29 -5.65% (225,553) Common stock held in treasury (3,782 million shares in 2018 and 3,780 million shares in 2017) 30 -65.15% ExxonMobil share of equity 31 Noncontrolling interests 6,734 32 1.95% Total equity 198,528 33 57.35% $ 346,196 Total liabilities and equity 34 100.00% 35 36

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Expert Answer

Step 1

FLEV or financial leverage = Net financing debt/ Common equity; It is the measure of leverage from financing activities.  Common equity = (Operating Assets- Operating Liabilities)- (Financial Liabilties- financial assets).

ROA=Net Income/total Assets

Return on net operating Assets ...

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Consolidated Blance Sheet-USD 5)Sin Mllens Dec 31 2018 ineweor decrease Crent at a Cash and cash eqialents S042 Note and a reble, less tmsted ceub mts 240 vories Cude al, peoducts and merchandise 428% Matera and p 455 120% Other ounet ats 272 a37% Ttal curnt a 4070 Iestmnts dans nd ng terecivables 11.2% raperty plat and eqmntoost, ls accmted dpeion and depetio 24710 713 Othor ats indin ing 10.312 2 al ats 100.00% Current labilities Nots and loans payae 17, 499% d 3726 Acounts payled 107% Income tancs payabl 2612 075% Ttal curent labities 205 Long tem deb Ptrutiment b e 20272 sass Delaed incom lubi 2724 787 Long tem obligutions to equity companics Other long tem oblgte 4382 127% 1804 Total kabilities 24744 42 65 Commiments and contingencie tuity Common stock without par value B,000 million hares authoriaes, &,015 miion shares ised 15,25 441% Eamings revested 421653 171 8% Accumated other comprehense income Common shock held in treasury ,782on thares in 2018 and 3,780 millen thares in 2017 564 (22555 4515% tenMobil thare of equity 614 Nontring intes 195% al equty l b S461 nd qty s0000%

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