Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Analysis and Interpretation of Ratios When RNOA Exceeds ROE Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Balance
Analysis and Interpretation of Ratios When RNOA Exceeds ROE Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Balance Sheet \begin{tabular}{|l|r|r|} \hline \multicolumn{1}{|c|}{ At December 31,5 millions } & 2018 & 2017 \\ \hline Current assets & & \\ \hline Cash and cash equivalents & $10,019 & $8,079 \\ \hline Marketable securities & 31,095 & 33,632 \\ \hline Accounts receivable, net & 7,587 & 5,832 \\ \hline Prepaid expenses and other current assets & 1,779 & 1,020 \\ \hline Total current assets & 50,480 & 48,563 \\ \hline Property and equipment, net & 24,683 & 13,721 \\ \hline Intangible assets, net & 1,294 & 1,884 \\ \hline Goodwill & 18,301 & 18,221 \\ \hline Other assets & 2,576 & 2,135 \\ \hline Total assets & $97,334 & $84,524 \\ \hline Current liabilities & & \\ \hline Accounts payable & $820 & $380 \\ \hline Partners payable & 541 & 390 \\ \hline Accrued expenses and other current liabilities & 5,509 & 2,892 \\ \hline Deferred revenue and deposits & 147 & 98 \\ \hline Total current liabilities & 41,981 & 33,990 \\ \hline Other liabilities & 84,127 & 74,347 \\ \hline Total liabilities & $97,334 & $84,524 \\ \hline Stockholders' equity & 22% & \\ \hline Common stock and additional paid-in capital & 3,760 \\ \hline Accumulated other comprehensive loss & 6,190 & 6,417 \\ \hline Retained earnings & 13,207 & 10,177 \\ \hline Total stockholders' equity & 40,584 \\ \hline Total liabilities and stockholders' equity & (227) \\ \hline Combined federal and state statutory tax rate & & \\ \hline & & \\ \hline \end{tabular} a. Compute net operating profit after tax (NOPAT) for 2018. Assume that the combined federal and state statutory tax rate is 22%. Hint: Carefully consider whether nonoperating expense is positive or negative. 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started