Compute and Interpret Coverage, Liquidity and Solvency Ratios Selected balance sheet and income statement information from Amazon for 2016 through 2018 follows. $ millions 2018 2017 2016 Net operating profit after tax (NOPAT) $12,186 $3,576 $2,837 Net income 11,181 3,367 2,632 Operating profit 13,787 4,558 4,646 Interest expense 1,474 882 503 Cash from operating activities 34,103 20,385 19,095 Current assets 83,362 66,819 50,817 Current liabilities 71,127 60,198 45,569 Cash and cash equivalents 35,243 22,779 21,461 Marketable securities 10,545 11,615 7,378 Total debt 24,435 25,733 8,002 Assets 180,539 145,754 92,576 Liabilities 123,863 107,745 66,682 Equity 45,291 28,817 20,056 Net operating assets (NOA) 26,826 22,325 1,038 a. Compute profitability measures RNOA and ROE for 2018 and 2017. In which year are the measures stronger? Round answers to one decimal place (ex: 0.2345 = 23.5%). 2017 2018 0% X RNOA 0% X 0% X ROE 0% X Adjusting for Negative Equity Phillip Morris reported the following information in its 2018 Form 10-K. Dec. 31, 2018 Dec. 31, 2017 $0 $0 1,939 31,944 (10,111) 23,772 1,972 30,755 (8,535) 24,192 $ millions Stockholders' (Deficit) Equity Common stock, no par value (2,109,316,331 shares issued in 2018 and 2017) Additional paid-in capital Earnings reinvested in the business Accumulated other comprehensive losses Total stockholders' equity before treasury stock Less: cost of repurchased stock (554,736,610 and 556,098,569 shares in 2018 and 2017, respectively) Total PMI stockholders' deficit Noncontrolling interests Total stockholders' deficit Net earnings Net earnings attributable to noncontrolling interests Net earnings attributable to PMI 35,301 (11,529) 1,720 $(9,809) $8,286 375 35,382 (11,190) 1,856 $19,334) $7,911 a. Compute ROE for 2018 using the equity numbers as reported. Note: Round the percentage to one decimal place (for example, enter 14.6% for 14.55555%). (34.8) X % How do you interpret this ratio? Ratio is not interpretable b. Add back treasury shares to adjust for the company's negative equity. Recompute ROE for 2018. Note: Round the percentage to one decimal place (for example, enter 14.6% for 14.55555%). 39.5 X % Does the adjusted ratio better captures the company's performance during 2018? Yes