Compute ROA and adjusted ROA

CSX Corporation reported the following in its tax footnote to its 2019 financial statements. Use this information to answer the requirements.

$ millions	2019	2018	2017
Net income	$3,722	$3,700	$5,862
Interest expense, net	1,128	1,030	937
Average total assets	37,884	36,625	35,968

Compute (a) return on assets and (b) the adjusted return on assets for each of the three years.

Assume a statutory tax rate of 37% for 2017 and 22% for 2018 and 2019.

a. Compute return on assets (ROA) for 2017, 2018, and 2019

Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROA for each year.

	Year	Numerator	Denominator	ROA
		AnswerNet incomeNet income (adjusted)Interest expense, netAverage total assetsAverage total equity	AnswerNet incomeNet income (adjusted)Interest expense, netAverage total assetsAverage total equity
	2017	Answer	Answer
	2018	Answer	Answer
	2019	Answer	Answer

b. Compute adjusted return on assets (ROA) for 2017, 2018, and 2019

Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute adjusted ROA for each year.

	Year	Numerator	Denominator	adjusted ROA
		AnswerNet incomeNet income (adjusted)Interest expense, netAverage total assetsAverage total equity	AnswerNet incomeNet income (adjusted)Interest expense, netAverage total assetsAverage total equity
	2017	Answer	Answer
	2018	Answer	Answer
	2019	Answer	Answer