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Compute the DuPont Disaggregation of ROE Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC Consolidated Statement of Income For
Compute the DuPont Disaggregation of ROE Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC Consolidated Statement of Income For Year Ended December 31, 5 millions 2018 Revenue $55,838 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 24,913 Interest and other income (expensel.net 448 Income before provision for income taxes 25,361 Provision for income taxes 3,249 Net income $22,112 FACEBOOK INC. Consolidated Balance Sheet At December 31, 5 millions 2018 2017 Current assets Cash and cash equivalents $10,019 $8,079 Marketable securities 31,095 33,632 Accounts receivable, net 7,587 5,832 Prepaid expenses and other current assets 1,779 1,020 Total current assets 50,480 48 563 Property and equipment, net 24,683 13,721 Intangible assets, net 1.294 1,884 Goodwill 18,301 18221 Other assets $2,576 $2,135 Total assets $97,334 $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 10,172 Stockholders' equity Common stock and additional paid in capital 42,906 40,584 Accumulated other comprehensive loss (760) Retained earnings 41,981 33,990 Total stockholders' equity 84,127 74347 Total liabilities and stockholders' equity $97,334 $84,524 Required a. Compute return on equity (ROE). Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%). 0 % . Apply the DuPont disaggregation into return on assets (ROA) and financial leverage. Note: For FL, round amount to three decimal places (for example, enter 6.776 for 6.77555). Note: For ROA and ROE, round percentages to one decimal place (for example, enter 6.7% for 6.6555%). ROA X FL = ROE 0% c. Calculate the profitability and productivity components of ROA. Note: For AT,round amount to three decimal places (for example, enter 6.776 for 6.77555). Note: For PM and ROA, round percentages to one decimal place (for example, enter 6.7% for 6.6555%). PM X AT 11 ROA 0 = d. Confirm the full DuPont disaggregation: ROEPM AT FL. Note: For AT and FL, round amounts to three decimal places (for example, enter 6.776 for 6.77555). Note: For PM and ROE, round percentages to one decimal place (for example, enter 6.7% for 6.6555%). PM X AT x FL ROE 0 0
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