I1.59 Computing Return on Equity and Return on Assets Equity

(a)

SEK 87,770

£5,618 LOS The following table contains financial statement infomrntion for OMV Group, which is a petrochemical company headquartered in Vienna.

OMV GROUP euros millions 2018 Sales .............. €22,930 Net profit (Loss) ..... 3,298 Assets ............. 36,961 Equity ............. 15,342 Required 2017

€20,222 1,486 31 ,576 14,334 2016

€ 19,260

(230)

32, 112 13,925 2015

€32,664 14,298

a. What was OMV Group's return on assets (ROA) for 2016, 2017, and 2018?

b. Determine its profit margin (PM) for each of the three years 2016-2018.

c. Determine its asset turnover (AT) for each of the three years 2016-2018.

d. What factor is mainly responsible for the change in OMV's ROA from 2016 to 2017? Is it profit margin or asset turnover or both?

e. What factor is mainly responsible for the change in OMV's ROA from 2017 to 2018? Is it profit margin or asset turnover or both?

f Determine OMV Group's return on equity (ROE) for each of the three years 2016-2018.