B) Alibaba 0.0/1.5 points (graded) Calculate the Return on Invested Capital for Alibaba for the following three years (Assuming tax = 0% for simplicity). Use the tables found in the Consolidated Financials tables for Alibaba and submit your answer as a percentage. Note the data in the table is listed with the year ending on March 31, so if a column were titled 2011 it would correspond to a financial ratio calculation for 2010-2011. To represent a negative number instead of putting the number in parenthesis, precede with "-". Ex. Negative one should be represented as "-1". Round to 3 significant figures. 2013-14 % 2014-15 % 2015-16 % Next Hint ? Hint (1 of 4): Return on Invested Capital (ROIC) = Net Income + After Tax Interest Expense Total Liabilities & Shareholder's Equity - Current Liabilities Hint (2 of 4): Since tax = 0% for this problem, After Tax Interest Expense = Interest Expense Hint (3 of 4): Use the absolute value of Interest Expense (i.e., treat it as positive, even though the value is negative) when plugging into the equations! Hint (4 of 4): You will need to use data from both the Income Statement and Balance Sheet Income Statement All numbers in thousands Revenue 3/31/2016 3/31/2015 3/31/2014 Total Revenue 15,638,000 12,292,000 8,444,000 Cost of Revenue 5,312,000 3,844,000 2,150,000 Gross Profit 10,327,000 8,447,000 6,294,000 Operating Expenses Research Development 2,132,000 1,719,000 819,000 Selling General and 3,172,000 2,631,000 1,409,000 Administrative Non Recurring 70,000 28,000 7,000 Others 453,000 337,000 51,000 Total Operating Expenses 5,827,000 4,715,000 2,286,000 Operating Income or Loss 4,500,000 3,732,000 4,008,000 Income from Continuing Operations Total Other Income/Expenses 8,397,000 1,926,000 656,000 Net Earnings Before Interest and 12,897,000 5,658,000 4,663,000 Taxes Interest Expense 301,000 444,000 353,000 Income Before Tax 12,596,000 5,214,000 4,310,000 Income Tax Expense 1,306,000 1,035,000 514,000 Minority Interest 5,033,000 1,931,000 174,000 Net Income From Continuing 11,049,000 3,913,000 3,750,000 Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items Net Income Net Income 11,049,000 3,913,000 3,750,000 Preferred Stock And Other Adiustments Net Income Applicable To 11,049,000 3,895,000 3,711,000 Balance Sheet All numbers in thousands Period Ending Other Liabilities verenreu Long Term 3/31/2016 3/31/2015 3/31/2014 335,000 347,000 12,000 1,066,000 797,000 413,000 5,033,000 1,931,000 174,000 22,746,000 17,636,000 11,549,000 54,000 106,000 1,673,000 Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity Misc. Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity 12,176,000 4,007,000 190,000 20,441,000 18,895,000 4,349,000 932,000 557,000 179,000 Total Stockholder Equity 33,550,000 23,459,000 4,718,000 Net Tangible Assets 19,651,000 15,134,000 2,248,000 Conversion 0.15 U ALIBABA GROUP HOLDING LTD ADR (BABA) Cash Flow Flag INCOME STATEMENT Fiscal year ends in March. CNY in millions except per share data. 2012-03 2013-03 2014-03 2015-03 2016-03 Revenue 3003.75 5177.55 7875.6 11430.6 15171.45 Cost of revenue 983.1 1457.85 2005.35 3575.1 5153.25 Gross profit 2020.65 3719.7 5870.25 7855.5 10018.2 Operating expenses 0 0 o o 0 Sales, General and administrative 790.35 975.3 1314.45 2446.95 3076.8 Other operating expenses 478.05 1131.75 817.8 1938.3 2576.1 Total operating expenses 1268.4 2107.05 2132.25 4385.25 5652.9 Operating income 752.25 1612.65 3738 3470.25 4365.3 0 0 0 0 0 e Interest Expense 10.2 235.8 329.25 412.5 291.9 S Other income (expense) 87.75 139.95 611.55 1791.15 8146.8 Income before income taxes 829.8 1516.8 4020.3 4848.9 12220.2 0 0 0 0 0 Provision for income taxes 126.3 218.55 479.4 962.4 1267.35 - Minority interest 65.55 17.55 13.2 8.85 -25.65 3 Other income 61.8 16.65 -17.25 -229.65 -285.15 Net income from continuing operations 699.75 1297.35 3510.45 3648 10693.35 0 0 0 0 0 Other 65.55 -17.55 -13.2 -8.85 25.65 Net income 634.2 1279.8 3497.25 3639.15 10719 Preferred dividend 0 19.2 35.85 16.8 0 Net income available to common shareholders 634.2 1260.6 3461.4 3622.35 10719 0 0 0 0 5 Earnings per share 0 0 0 0 Basic 0 1.5435 1.5495 4.3605 3 Diluted 0 1.5 1.455 4.1835 Weighted average shares outstanding 0 0 0 0 Basic 0 339.9 350.55 368.7 Diluted 0 349.8 375 384.3 2 EBITDA 970.5 1892.85 4597.65 5923.65 13517.25 TTM 16957.8 5908.2 11049.6 0 3357.6 2778.75 6136.35 4913.25 0 314.25 4333.8 8932.8 o 1371.9 -82.8 -501.45 7142.25 0 82.8 7225.05 0 7225.05 0 0 2.9505 2.8365 0 368.55 383.55 9777.3 OOOOOOO 3 Cash Flow All numbers in thousands Period Ending 3/31/2016 3/31/2015 3/31/2014 Net Income 11,049,000 3,913,000 3,750,000 Operating Activities, Cash Flows Provided By or Used In Depreciation 1,077,000 739,000 266,000 Adjustments To -4,516,000 1,687,000 935,000 Net Income Changes in Accounts -137,000 -214,000 Receivables Changes in 1,808,000 2,281,000 1,279,000 Liabilities Changes in Inventories Changes in Other Operating Activities -603,000 -1,845,000 -1,788,000 Total Cash Flow From Operating Activities 8,788,000 6,648,000 4,242,000 13 Investing Activities, Cash Flows Provided By or Used In Capital -841,000 -769,000 14 Expenditures -528,000 15 Investments -4,831,000 -5,909,000 -4,453,000 Other Cash flows from Investing -952,000 -1,943,000 -326,000 16 Activities Total Cash Flows From Investing -6,622,000 -8,622,000 -5,307,000 17 Activities Financing Activities, Cash Flows Provided By or Used In 18 19 Dividends Paid -27,000 -33,000 Sale Purchase of -2,945,000 9,939,000 -517,000 20 Stock 21 Net Borrowings 383,000 4,201,000 2,057,000 Other Cash Flows from Financing 22 Activities Total Cash Flows From Financing -2,450,000 14,113,000 1,506,000 23 Activities Effect Of Exchange 72,000 -18,000 -16,000 24 Rate Changes Change In Cash and Cash Equivalents -213,000 12,121,000 426,000 25 B) Alibaba 0.0/1.5 points (graded) Calculate the Return on Invested Capital for Alibaba for the following three years (Assuming tax = 0% for simplicity). Use the tables found in the Consolidated Financials tables for Alibaba and submit your answer as a percentage. Note the data in the table is listed with the year ending on March 31, so if a column were titled 2011 it would correspond to a financial ratio calculation for 2010-2011. To represent a negative number instead of putting the number in parenthesis, precede with "-". Ex. Negative one should be represented as "-1". Round to 3 significant figures. 2013-14 % 2014-15 % 2015-16 % Next Hint ? Hint (1 of 4): Return on Invested Capital (ROIC) = Net Income + After Tax Interest Expense Total Liabilities & Shareholder's Equity - Current Liabilities Hint (2 of 4): Since tax = 0% for this problem, After Tax Interest Expense = Interest Expense Hint (3 of 4): Use the absolute value of Interest Expense (i.e., treat it as positive, even though the value is negative) when plugging into the equations! Hint (4 of 4): You will need to use data from both the Income Statement and Balance Sheet Income Statement All numbers in thousands Revenue 3/31/2016 3/31/2015 3/31/2014 Total Revenue 15,638,000 12,292,000 8,444,000 Cost of Revenue 5,312,000 3,844,000 2,150,000 Gross Profit 10,327,000 8,447,000 6,294,000 Operating Expenses Research Development 2,132,000 1,719,000 819,000 Selling General and 3,172,000 2,631,000 1,409,000 Administrative Non Recurring 70,000 28,000 7,000 Others 453,000 337,000 51,000 Total Operating Expenses 5,827,000 4,715,000 2,286,000 Operating Income or Loss 4,500,000 3,732,000 4,008,000 Income from Continuing Operations Total Other Income/Expenses 8,397,000 1,926,000 656,000 Net Earnings Before Interest and 12,897,000 5,658,000 4,663,000 Taxes Interest Expense 301,000 444,000 353,000 Income Before Tax 12,596,000 5,214,000 4,310,000 Income Tax Expense 1,306,000 1,035,000 514,000 Minority Interest 5,033,000 1,931,000 174,000 Net Income From Continuing 11,049,000 3,913,000 3,750,000 Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items Net Income Net Income 11,049,000 3,913,000 3,750,000 Preferred Stock And Other Adiustments Net Income Applicable To 11,049,000 3,895,000 3,711,000 Balance Sheet All numbers in thousands Period Ending Other Liabilities verenreu Long Term 3/31/2016 3/31/2015 3/31/2014 335,000 347,000 12,000 1,066,000 797,000 413,000 5,033,000 1,931,000 174,000 22,746,000 17,636,000 11,549,000 54,000 106,000 1,673,000 Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity Misc. Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity 12,176,000 4,007,000 190,000 20,441,000 18,895,000 4,349,000 932,000 557,000 179,000 Total Stockholder Equity 33,550,000 23,459,000 4,718,000 Net Tangible Assets 19,651,000 15,134,000 2,248,000 Conversion 0.15 U ALIBABA GROUP HOLDING LTD ADR (BABA) Cash Flow Flag INCOME STATEMENT Fiscal year ends in March. CNY in millions except per share data. 2012-03 2013-03 2014-03 2015-03 2016-03 Revenue 3003.75 5177.55 7875.6 11430.6 15171.45 Cost of revenue 983.1 1457.85 2005.35 3575.1 5153.25 Gross profit 2020.65 3719.7 5870.25 7855.5 10018.2 Operating expenses 0 0 o o 0 Sales, General and administrative 790.35 975.3 1314.45 2446.95 3076.8 Other operating expenses 478.05 1131.75 817.8 1938.3 2576.1 Total operating expenses 1268.4 2107.05 2132.25 4385.25 5652.9 Operating income 752.25 1612.65 3738 3470.25 4365.3 0 0 0 0 0 e Interest Expense 10.2 235.8 329.25 412.5 291.9 S Other income (expense) 87.75 139.95 611.55 1791.15 8146.8 Income before income taxes 829.8 1516.8 4020.3 4848.9 12220.2 0 0 0 0 0 Provision for income taxes 126.3 218.55 479.4 962.4 1267.35 - Minority interest 65.55 17.55 13.2 8.85 -25.65 3 Other income 61.8 16.65 -17.25 -229.65 -285.15 Net income from continuing operations 699.75 1297.35 3510.45 3648 10693.35 0 0 0 0 0 Other 65.55 -17.55 -13.2 -8.85 25.65 Net income 634.2 1279.8 3497.25 3639.15 10719 Preferred dividend 0 19.2 35.85 16.8 0 Net income available to common shareholders 634.2 1260.6 3461.4 3622.35 10719 0 0 0 0 5 Earnings per share 0 0 0 0 Basic 0 1.5435 1.5495 4.3605 3 Diluted 0 1.5 1.455 4.1835 Weighted average shares outstanding 0 0 0 0 Basic 0 339.9 350.55 368.7 Diluted 0 349.8 375 384.3 2 EBITDA 970.5 1892.85 4597.65 5923.65 13517.25 TTM 16957.8 5908.2 11049.6 0 3357.6 2778.75 6136.35 4913.25 0 314.25 4333.8 8932.8 o 1371.9 -82.8 -501.45 7142.25 0 82.8 7225.05 0 7225.05 0 0 2.9505 2.8365 0 368.55 383.55 9777.3 OOOOOOO 3 Cash Flow All numbers in thousands Period Ending 3/31/2016 3/31/2015 3/31/2014 Net Income 11,049,000 3,913,000 3,750,000 Operating Activities, Cash Flows Provided By or Used In Depreciation 1,077,000 739,000 266,000 Adjustments To -4,516,000 1,687,000 935,000 Net Income Changes in Accounts -137,000 -214,000 Receivables Changes in 1,808,000 2,281,000 1,279,000 Liabilities Changes in Inventories Changes in Other Operating Activities -603,000 -1,845,000 -1,788,000 Total Cash Flow From Operating Activities 8,788,000 6,648,000 4,242,000 13 Investing Activities, Cash Flows Provided By or Used In Capital -841,000 -769,000 14 Expenditures -528,000 15 Investments -4,831,000 -5,909,000 -4,453,000 Other Cash flows from Investing -952,000 -1,943,000 -326,000 16 Activities Total Cash Flows From Investing -6,622,000 -8,622,000 -5,307,000 17 Activities Financing Activities, Cash Flows Provided By or Used In 18 19 Dividends Paid -27,000 -33,000 Sale Purchase of -2,945,000 9,939,000 -517,000 20 Stock 21 Net Borrowings 383,000 4,201,000 2,057,000 Other Cash Flows from Financing 22 Activities Total Cash Flows From Financing -2,450,000 14,113,000 1,506,000 23 Activities Effect Of Exchange 72,000 -18,000 -16,000 24 Rate Changes Change In Cash and Cash Equivalents -213,000 12,121,000 426,000 25