Adjusting for Negative Equity Phillip Morris reported the following information in its 2 0 1 8 Form 1 0 K $ millions Dec 3 1 , 2 0 1 8 Dec 3 1 , 2 0 1 7 Stockholders' ( Deficit ) Equity Common stock, no par value ( 2 , 1 0 9 , 3 1 6 , 3 3 1 shares issued in 2 0 1 8 and 2 0 1 7 ) $ 0 $ 0 Additional paid in capital 1 , 9 3 9 1 , 9 7 2 Earnings reinvested in the business 3 1 , 0 1 4 2 9 , 8 5 9 Accumulated other comprehensive losses ( 1 0 , 1 1 1 ) ( 8 , 5 3 5 ) Total stockholders' equity before treasury stock 2 2 , 8 4 2 2 3 , 2 9 6 Less cost of repurchased stock ( 5 5 4 , 7 3 6 , 6 1 0 and 5 5 6 , 0 9 8 , 5 6 9 shares in 2 0 1 8 and 2 0 1 7 , respectively ) 3 5 , 3 0 1 3 5 , 3 8 2 Total PMI stockholders' deficit ( 1 2 , 4 5 9 ) ( 1 2 , 0 8 6 ) Noncontrolling interests 1 , 7 2 0 1 , 8 5 6 Total stockholders' deficit ( 1 0 , 7 3 9 ) ( 1 0 , 2 3 0 ) Net earnings $ 8 , 2 8 6 Net earnings attributable to noncontrolling interests 3 7 5 Net earnings attributable to PMI $ 7 , 9 1 1 a Compute ROE for 2 0 1 8 using the equity numbers as reported Note 1 Select the appropriate numerator and denominator used to compute ROE from the drop down menu options 2 Enter the numerator and denominator amounts to compute ROE Numerator Denominator ROE Answer 1 Answer 2 Answer 3 Answer 4 How do you interpret this ratio Answer 5 b Add back treasury shares to adjust for the company s negative equity Recompute ROE for 2 0 1 8 Numerator Denominator ROE Answer 6 Answer 7 Answer 8 Answer 9 Does the adjusted ratio better captures the company s performance during 2 0 1 8 Answer 1 0 Adjusting for Negative Equity Phillip Morris reported the following information in its 2 0 1 8 Form 1 0 K a Compute ROE for 2 0 1 8 using the equity numbers as reported Note 1 Select the appropriate numerator and denominator used to compute ROE from the drop down menu options 2 Enter the numerator and denominator amounts to compute ROE How do you interpret this ratio b Add back treasury shares to adjust for the company's negative equity Recompute ROE for 2 0 1 8 Does the adjusted ratio better captures the company's performance during 2 0 1 8

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Adjusting for Negative Equity Phillip Morris reported the following information in its 2 0 1 8 Form 1 0   K   $ millions Dec  3 1 , 2 0 1 8 Dec  3 1 , 2 0 1 7 Stockholders' ( Deficit ) Equity Common stock, no par value ( 2 , 1 0 9 , 3 1 6 , 3 3 1 shares issued in 2 0 1 8 and 2 0 1 7 ) $ 0 $ 0 Additional paid   in capital 1 , 9 3 9 1 , 9 7 2 Earnings reinvested in the business 3 1 , 0 1 4 2 9 , 8 5 9 Accumulated other comprehensive losses ( 1 0 , 1 1 1 ) ( 8 , 5 3 5 ) Total stockholders' equity before treasury stock 2 2 , 8 4 2 2 3 , 2 9 6 Less  cost of repurchased stock ( 5 5 4 , 7 3 6 , 6 1 0 and 5 5 6 , 0 9 8 , 5 6 9 shares in 2 0 1 8 and 2 0 1 7 , respectively ) 3 5 , 3 0 1 3 5 , 3 8 2 Total PMI stockholders' deficit ( 1 2 , 4 5 9 ) ( 1 2 , 0 8 6 ) Noncontrolling interests 1 , 7 2 0 1 , 8 5 6 Total stockholders' deficit ( 1 0 , 7 3 9 ) ( 1 0 , 2 3 0 ) Net earnings $ 8 , 2 8 6 Net earnings attributable to noncontrolling interests 3 7 5 Net earnings attributable to PMI $ 7 , 9 1 1 a   Compute ROE for 2 0 1 8 using the equity numbers as reported  Note  1   Select the appropriate numerator and denominator used to compute ROE from the drop   down menu options  2   Enter the numerator and denominator amounts to compute ROE  Numerator Denominator ROE Answer 1 Answer 2 Answer 3 Answer 4 How do you interpret this ratio  Answer 5 b   Add back treasury shares to adjust for the company s negative equity  Recompute ROE for 2 0 1 8   Numerator Denominator ROE Answer 6 Answer 7 Answer 8 Answer 9 Does the adjusted ratio better captures the company s performance during 2 0 1 8   Answer 1 0 Adjusting for Negative Equity Phillip Morris reported the following information in its 2 0 1 8 Form 1 0   K   a   Compute ROE for 2 0 1 8 using the equity numbers as reported  Note  1   Select the appropriate numerator and denominator used to compute ROE from the drop   down menu options  2   Enter the numerator and denominator amounts to compute ROE  How do you interpret this ratio  b   Add back treasury shares to adjust for the company's negative equity  Recompute ROE for 2 0 1 8   Does the adjusted ratio better captures the company's performance during 2 0 1 8

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Adjusting for Negative Equity Phillip Morris reported the following information in its 2 0 1 8 Form 1 0 - K . $ millions Dec.

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