Apply DuPont Disaggregation of ROE Selected balance sheet and income statement information for Facebook Inc. follows. $ millions Dec. 31, 2018 Dec. 31, 2017 Total assets $98,899 $86,089 Total liabilities 14,772 11,742 Sales 57,403 Net income 23,677 a. Compute ROE and disaggregate the ratio into its DuPont components of ROA and financial leverage. 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 2018 ROE. Numerator Denominator ROE Answer Answer Answer Answer 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 2018 ROA. Numerator Denominator ROA Answer Answer Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute Financial Leverage from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Financial Leverage. Numerator Denominator Financial Leverage Answer Answer Answer Answer b. Disaggregate ROA into Profit Margin and Asset Turnover components. Note: 1. Select the appropriate numerator and denominator used to compute Profit Margin from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Profit Margin. Numerator Denominator Profit Margin Answer Answer Answer Answer Note: 1. Select the appropriate numerator and denominator used to compute Asset Turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Asset Turnover. Numerator Denominator Asset Turnover Answer Answer Answer Answer

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.8E

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Apply DuPont Disaggregation of ROE

Selected balance sheet and income statement information for Facebook Inc. follows.

$ millions	Dec. 31, 2018	Dec. 31, 2017
Total assets	$98,899	$86,089
Total liabilities	14,772	11,742
Sales	57,403
Net income	23,677

a. Compute ROE and disaggregate the ratio into its DuPont components of ROA and financial leverage.

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 2018 ROE.

	Numerator	Denominator	ROE
	Answer	Answer
	Answer	Answer

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 2018 ROA.

	Numerator	Denominator	ROA
	Answer	Answer
	Answer	Answer

Note: 1. Select the appropriate numerator and denominator used to compute Financial Leverage from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Financial Leverage.

	Numerator	Denominator	Financial Leverage
	Answer	Answer
	Answer	Answer

b. Disaggregate ROA into Profit Margin and Asset Turnover components.

Note: 1. Select the appropriate numerator and denominator used to compute Profit Margin from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Profit Margin.

	Numerator	Denominator	Profit Margin
	Answer	Answer
	Answer	Answer

Note: 1. Select the appropriate numerator and denominator used to compute Asset Turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute 2018 Asset Turnover.

	Numerator	Denominator	Asset Turnover
	Answer	Answer
	Answer	Answer

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