E3-32.Compute ROA and Adjusted ROA ANALYST ADJUSTMENTS 3.1 The following information was reported by Yum Brands in its form 10-K. Use this information to answer the requirements.

$millions Net income ............. .

Interest expense, net ... .. .

Average total assets ...... .

December 31 , 2019

$1 ,294 484 4,681 December 31 , 2018

$1,542 496 4,721

a. What managerial insight does the ' adjusted return on assets' ratio offer as compared to the usual ROA metric?

b. Compute (i) return on assets, and (ii) the adjusted return on assets, for each year. Assume a statutory tax rate of 22%. (iii) A re the two ratios materially different from each other? Explain.

YUM BRANDS INC

(YUM)