GM has the following balances at Dec 31,2017:

- Operating Assets $1,200,000

- Financial Assets $800,000

- Operating Liabilities $200,000

- Financial liabilities $1,400,000

- Operating Income $200,000

- TaxRate 40%

- Net Income $110,000

- Preferred Stock dividends $10,000

Required:

1. Calculate the following (use 2017 ending balances only):

a. ReturnonNetOperatingAssetsRNOA

b. Return on Common Equity ROCE

2. Justify and analyze your findings in required (1)