Calculating and disaggregating rate of return on common shareholders' equity. Informa- tion taken from the annual reports of Exxon Mobil, a petroleum company, for three recent years appears below (amounts in millions):

Year 11 Year 12 Year 13 Revenues $212,785 Net Income 15,003 Average Total Assets 146,087 Average Common Shareholders' Equity 71,959

$204,506 $246,738 11,011 20,960 147,909 163,461 73,879 82,256

a. Compute the rate of return on common shareholders' equity for each year.

b. Disaggregate the rate of return on common shareholders' equity into profit margin for ROCE, total assets turnover, and capital structure leverage ratio components.

c. How has the profitability of Exxon Mobil changed over the three years?

EXERCISES