Compute ROE and Nonoperating Return with Negative NNO and No Non Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Statement of Income For Year Ended December 31, $ millions 2018 Revenue $57,513 Costs and expenses Cost of revenue 9,355 Research and development 10,273 Marketing and sales 7,846 General and administrative 3,451 Total costs and expenses 30,925 Income from operations 26,588 Interest and other income (expense), net 448 Income before provision for income taxes 27,036 Provision for income taxes 3,249 Net income $23,787 Consolidated Balance Sheet At December 31, $ millions 2018 2017 Current assets Cash and cash equivalents $10,019 $8,079 Marketable securities 31,095 33,632 Accounts receivable, net 7,815 5,832 Prepaid expenses and other current assets 1,779 1,020 Total current assets 50,708 48,563 Property and equipment, net 24,683 13,721 Intangible assets, net 1,294 1,884 Goodwill 18,301 18,221 Other assets $2,576 $2,135 Total assets $97,562 $84,524 Current liabilities Accounts payable $820 $380 Partners payable 541 390 Accrued expenses and other current liabilities 5,509 2,892 Deferred revenue and deposits 147 98 Total current liabilities 7,017 3,760 Other liabilities 6,190 6,417 Total liabilities 13,207 10,177 Stockholders' equity Common stock and additional paid-in capital 42,906 40,584 Accumulated other comprehensive loss (760) (227) Retained earnings 42,209 33,990 Total stockholders' equity 84,355 74,347 Total liabilities and stockholders' equity $97,562 $84,524 Use these financial statements to answer the requirements. For the 2018 fiscal year, Facebook had a return on net operating assets (RNOA) of 61.78%. a. Compute ROE Note: Round percentage to two decimal places (for example, enter 6.66% for 6.6555%). b. Compute net nonoperating obligations (NNO) for 2018 and 2017, net nonoperating expense (NNE), and the NNE as a percentage of NNO (NNEP), assuming a 22% statutory tax ra Note: Round NNEP percentage to two decimal places (for example, enter 6.66% for 6.65554) 2018 NNOS O million 2017 NNOS O million 2018 NNES O million 2018 NNEP: c. Compute ALEV and Spread. Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.7755 Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.65554) 2018 FLEVO 2018 Spread o d. Show that ROERNOA. (FLEV Spread). Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555) Note: For RNOA, Spread, and ROE, round percentages to two decimal places (for example, enter 6.66% for 6.65554) Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 FLEV: 0 2018: Spread: 0 % d. Show that ROERNOA + (FLEV Spread). Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555). Note: For RNOA, Spread, and ROE, round percentages to two decimal places (for example, enter 6.66% for 6.6555%). RNOA + FLEV x Spread ROE 0% + 0%) - 0% OX e. What is the nonoperating return for the year? Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). % 0 Compute ROE and Nonoperating Return with Negative NNO and No Non Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Statement of Income For Year Ended December 31, $ millions 2018 Revenue $57,513 Costs and expenses Cost of revenue 9,355 Research and development 10,273 Marketing and sales 7,846 General and administrative 3,451 Total costs and expenses 30,925 Income from operations 26,588 Interest and other income (expense), net 448 Income before provision for income taxes 27,036 Provision for income taxes 3,249 Net income $23,787 Consolidated Balance Sheet At December 31, $ millions 2018 2017 Current assets Cash and cash equivalents $10,019 $8,079 Marketable securities 31,095 33,632 Accounts receivable, net 7,815 5,832 Prepaid expenses and other current assets 1,779 1,020 Total current assets 50,708 48,563 Property and equipment, net 24,683 13,721 Intangible assets, net 1,294 1,884 Goodwill 18,301 18,221 Other assets $2,576 $2,135 Total assets $97,562 $84,524 Current liabilities Accounts payable $820 $380 Partners payable 541 390 Accrued expenses and other current liabilities 5,509 2,892 Deferred revenue and deposits 147 98 Total current liabilities 7,017 3,760 Other liabilities 6,190 6,417 Total liabilities 13,207 10,177 Stockholders' equity Common stock and additional paid-in capital 42,906 40,584 Accumulated other comprehensive loss (760) (227) Retained earnings 42,209 33,990 Total stockholders' equity 84,355 74,347 Total liabilities and stockholders' equity $97,562 $84,524 Use these financial statements to answer the requirements. For the 2018 fiscal year, Facebook had a return on net operating assets (RNOA) of 61.78%. a. Compute ROE Note: Round percentage to two decimal places (for example, enter 6.66% for 6.6555%). b. Compute net nonoperating obligations (NNO) for 2018 and 2017, net nonoperating expense (NNE), and the NNE as a percentage of NNO (NNEP), assuming a 22% statutory tax ra Note: Round NNEP percentage to two decimal places (for example, enter 6.66% for 6.65554) 2018 NNOS O million 2017 NNOS O million 2018 NNES O million 2018 NNEP: c. Compute ALEV and Spread. Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.7755 Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.65554) 2018 FLEVO 2018 Spread o d. Show that ROERNOA. (FLEV Spread). Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555) Note: For RNOA, Spread, and ROE, round percentages to two decimal places (for example, enter 6.66% for 6.65554) Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 FLEV: 0 2018: Spread: 0 % d. Show that ROERNOA + (FLEV Spread). Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555). Note: For RNOA, Spread, and ROE, round percentages to two decimal places (for example, enter 6.66% for 6.6555%). RNOA + FLEV x Spread ROE 0% + 0%) - 0% OX e. What is the nonoperating return for the year? Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). % 0