L01, 4, 5, 6, 7 P3-49.Analysis and Interpretation of Ratios When RNOA Exceeds ROE The balance sheets and income statement for Facebook Inc. are found in P3-45. Use these financial statements to answer the requirements .

Required

a. Compute net operating profit after tax (NO PAT) for 2018. Assume that the combined federal and state statutory tax rate is 22%.

b. Compute net operating assets (NOA) for 2018 and 2017.

c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2018.

d. Compute return on equity (ROE) for 2018.

e. Comment on the difference between ROE and RNOA. What is causing this difference?

FACEBOOK INC. (FB) •