2015 575,856 17,524 93,580 21,410 MICROSOFT CORPORATION Income Statements For the years ended June 30, in miliona 2016 Revenue Product $81,502 Service 23,818 Total revenue 85,320 Cost of revenue Product 17,880 Service and other 14.900 Total cost of revenue 32,780 Gross margin 52,540 Research and development 11.988 Sales and marketing 14,603 General and administrative 4,583 Impairment, integration, and restructuring 1.110 Operating income 20,16 Other income (expense), net (431) Income before tas 19.751 Provision for income taxes 2,953 Net income $16290 39,038 60.542 12,046 15.713 4,611 10.011 18,161 345 18.507 6 314 $ 12.198 2016 2015 $ 5,595 90,931 17.908 2,902 5461 122.797 14,731 12,053 18.939 4,835 3.117 $174472 3.733 MICROSOFT CORPORATION Balance Sheet As of June 30, in milions) Current assets Cash and cash equivalent $ 6,510 Short-term investments 106.730 Accounts receivable.net 18.277 Inventories 2251 Oper current assets 5.892 Total current assets 139.660 Property and equipment, et 18,356 Equity and other investments 10,431 Goodwill 17.872 Intangible assets, net Other long-term assets 3.642 Total assets $193.694 Current liabilities Accounts payable $ 6,898 Short-term debt Current portion of long-term debt Accrued compensation 5.254 Income taxes 580 Short-term uneared revenue 27.458 Other current liabilities Total current abilities 59 357 Long-term debt 40.780 Long-term uneared revenue 6.441 Deferred income taxes 1476 Other long-term liabilities 13.640 Total abilities 121.097 Stockholders equity Common stock and paid-in capital 68,178 Retained earnings 2.282 Accumulated other comprehensive income 1.537 Total stockholders' equity 71997 Total liabilities and stockholders' equity $193.694 $ 12.904 6.591 4.985 2.490 5,096 606 23 223 6647 49.647 27,808 2,095 1.295 13.544 68.465 9096 2.522 80.083 $ 174 472 A. Compute net operating profit after tax (NOPAT) for 2016. Assume that combined federal and state statutory tax rates are 37%. Answer: NOPAT = B. Compute return on net operating assets (RNOA) for 2016. Assume equity and other investments are operating assets and net operating assets are $26,720 million in 2014 Answer: RNOA C. Compute return on equity (ROE) for 2016. Assume that stockholders' equity was $89,784 million in 2014 Answer: ROE D. What is the nonoperating return component of ROE for 2016 and 2015? Answer: Non-Operating Return 2016 Answer: Non-Operating Return 2015