Hello please help with the following 3 questions from below on decomposing ROE.

Thanks

EXHIBIT 1 IBM Selected Earnings Per Share Data For the Quarters Ended :" Jun - 00 Mar - 00 Dec - 99 Sep - 99 Jun - 99 Earnings Per Share ( from continuing operations ) 1. 06 0 . 83 1. 12 0 . 90 0. 91 Analyst Expected Earnings Per Share 1. 00 0. 77 1. 06 0 . 90 0. 88 Difference 0. 06 0. 06 0 . 06 0 . 03 %% Surprise 6. 00 %) 7.79% 5. 66% 0 . 00 % 3.41%All of the financial data in the tables that follow ( except "per share figures " ) , are in millions . EXHIBIT 2 IBM Earnings per Share* Jun - 00 Mar - 00 Dec - 99 Sep - 99 Jun - 99 Mar - 99 Dec - 98 Sep - 98\\ Jun - 98 Mar - 98 Dec - 97 Earings per Share of Common Stock - Basic $ 1.10 S 0 . 85 $ 1. 16 $ 0 . 97 $ 1.32 $ 0 . 80 $ 1.27 $ 0. 80 $ 0. 77 $ 0. 54{ 1. 08 Average Number of Common Shares Outstanding - Basic 1 , 767.6 1 , 777.2 1 , 793.01 1 , 805 .2 1 , 812 . 1 1 , 823.8 1 , 839.5 1 , 856. 9 1 , 879 .2 1 , 946. 6 1 , 929.6 Average Price per Share* $ 109.34\\ $ 111 .00 $ 102.95 $ 123.61\\ $ 1 16.48| $ 88.28 82.91\\ 62.20 $ 57.97 51.12 8 52.05 5 $ * All Data are Adjusted to Reflect 2 for 1 stock splits stock split 5/ 10199 EXHIBIT 2 ( continued ) Sep - 97 Jun - 97 Mar - 97 Dec - 96 Sep - 96 Earings per Share of Common Stock - Basic $ 0 . 69 0. 73 $ 0. 59 ; 0. 99\\ 0 . 62 Average Number of Common Shares Outstanding - Basic* 1 , 956.0 1 , 973.8 2, 006.8 2, 053.6 2 , 087. 4 Average Price per Share $ 52.13 $ 42.78 8 36.45 $ 36.61\\ 31.65 * All Data are Adjusted to Reflect 2 for 1 stock stock splits split 5/ 9197EXHIBIT 3 IBM Consolidated Statements of Income For the Quarters Ended :" Mar - 00 Dec - 99 Sep - 99 Jun - 99 Mar - 99 Dec - 98 Sep - 98 Jun - 98 Mar - 98 Dec - 97 Total Revenues $ 19 , 348\\ $ 24 , 182 $ 21 , 144\\ 21 , 905 20 , 317 $ 25 , 131\\ $ 20, 095 $ 18 , 823\\ $ 17 , 618\\ 23 , 723 Cost of Sales 12 , 337 15 , 299 13 , 580 13, 681 13 , 059 15 , 322 12 , 628 11 , 677 71 , 168 14 , 205 Gross Margin 7, 011 8, 883 7.564 8 , 224 7 , 258 9 . 809 7, 467 7. 146 9 , 518 Selling , General and Administrative Expenses 3 , 706 4 , 445 3, 501 2 , 846 3, 937 5, 074 4, 057 3, 812 3 , 719 5, 060 Research and Development 1 , 172 1 , 416 1 . 383 1 , 293 1 . 181 1, 407 1 , 240 1 . 220 1 . 179 1, 425 Total Operating Expenses 4 , 878 5 , 861 4, 884 4 , 139 5 , 118 6, 481 5 , 297 5, 032 4, 898 6, 485 Operating Income 2 , 133 3 , 022 2 . 680 4. 085 2 . 140 3 , 328 2 . 170 2 , 114 1. 552 3. 033 Other Income ( Expense ) , net 189 134 134 155 134 187 122 130 150 173 Interest Expense* 152 17 - 185 197 174 213 160 161 179 194 Income Before Taxes 2 , 170 2, 985 2 , 629 4 , 043 2 , 100 3. 302 2 , 132 2, 083 1 , 523 3, 012 Income Tax Expense* 651 896 867 1. 652 630 956 638 631 487 919 Net Income 1 , 519\\ 2, 089 $ 1 , 762 2 , 391\\ $ 1 , 470 $ 2 , 346 { 1 , 494\\ 1 , 452\\ $ 1, 036\\ $ 2, 093 EXHIBIT 3 ( continued ) Sep - 97 Jun - 97 Mar - 97 Dec - 96 Sep - 96\\ Total Revenues $ 18 , 605 $ 18 , 872 $ 17 , 308\\ 23 , 143 $ 18 , 062 Cost of Sales* 11 , 507 11, 471 10 . 716 13 , 822 10. 804 Gross Margin 7. 098 7 , 401 6, 592 9 , 321 7 , 258 Selling , General and Administrative Expenses 3. 932 3. 958 3. 684 5, 093 4 . 175 Research and Development 1 , 162 1 , 221 1 , 069 1 , 332 1 , 115 Total Operating Expenses 5, 094 5 , 179 4 , 753 6, 425 5 , 290 Operating Income 2 , 004 2 , 222 1 , 839 2. 896 1. 968 Other Income ( Expense ) , net* 162 137 185 181 183 Interest Expense* 183 179 172 190 172 Income Before Taxes 1, 983 2 , 180 1 , 852 2. 887 1 , 979 Income Tax Expense* 624 734 65% 864 694 Net Income $ 1 , 359 1 , 446 $ 1 , 195\\ 2, 023 $ 1 , 285EXHIBIT 4 IBM Consolidated Statements of Income For the Years Ended: 1999 1998 1997 1996 Sales 35 87,548 $ 81,667 $ 78,508 $ 75,947 Cost of Goods Sold 55,619 50,795 47,899 45,408 Gross Margin 31,929 30,872 30,609 30,539 Research and Development Expense 5,273 5,046 4,877 4,654 Other Selling, General & Administrative Expense 14,729 16,662 16,634 16,854 Total Operating Expenses Total Operating Income Other Income (Expense) net Interest Expense EBT Tax on EBT Net Income 20,002 1 1,927 557 727 1 1,757 4,045 7,712 21,708 9,164 589 713 9,040 2,712 6,328 21,51 1 9,098 657 728 9,027 2,934 6,093 21,508 9,031 707 716 9,022 3,158 5,864 EXHIBIT 5 Sales Cost of Goods Sold Gross Margin Research and Development Expense Other Selling, General & Administrative Expense Total Operating Expenses Total Operating Income Other Income (Expense) net Interest Expense EBT Tax on EBT Net Income 1 999 1.00 0.64 0.36 0.06 0.17 0.23 0.14 0.01 0.01 0.13 0.05 0.09 Common Size Statements of Income For the Years Ended: 1998 1.00 0.62 0.38 0.06 0.20 0.27 0.1 1 0.01 0.01 0.1 1 0.03 0.08 1997 1.00 0.61 0.39 0.06 0.21 0.27 0.12 0.01 0.01 0.1 1 0.04 0.08 1996 1.00 0.60 0.40 0.06 0.22 0.28 0.12 0.01 0.01 0.12 0.04 0.08 EXHIBIT 6 IBM Consolidated Balance Sheets For the Quarters Ended :` Mar - 00 Dec - 99 Sep - 99 Jun - 99 Mar - 99 Dec - 98 Sep - 98 Jun - 98 Mar - 98 Dec - 97 Assets Cash 3606 5. 831\\ 6, 026\\ 7.241 5, 356\\ $ 5. 768 $ 5. 869\\ 5. 471 5, 889 $ 7, 553 Receivables , Inventory and Pre- Paids 35533 37, 324 36, 851/ 36, 211 34. 445 36 , 592 32, 933 31, 541 31, 682 32, 865 Total Current Assets $ 39 , 139 $ 43, 155 42, 877 43, 452 39 . 801 1 42, 360 38 , 802 $ 40, 418 5 $ 37, 012 37, 571 Property & Equipment ( net ) 16959 17 , 590 17, 463 17 , 253 18, 866 19. 631 19. 005 18.453 18 , 223 18, 347 Investments and Other Assets 26666 26, 750 25, 035 22, 642 23. 084 24 , 109 21, 912 21, 647 22, 150 22, 734 Total Assets\\ $ 82 , 764 $ 87, 495 85 , 375 83 , 347 81 , 751! 86 , 100 79 , 719 5 $ 77 , 112 $ 77, 944 $ 81 , 499 Liabilities and Shareholders' Equity |Accounts Payable , Taxes & Accruals 21767 25 , 348\\ 23, 682\\ 21 , 248\\ $ 22, 922\\ 22 , 922\\ $ 18 , 275 16 , 779 $ 17 , 325 $ 20, 277 Debt Maturing within One Year 1384 4 14 , 230 14 , 096 14 , 713 13, 905 13, 905 13 , 237 13 , 271 12. 667 13 , 230 Total Current Liabilities S 35 , 611\\ $ 39, 578\\ 37 , 778 35 , 961 36, 827\\ 36 , 827 31 , 512 30 , 050 29, 992 33 , 507\\ Long Term Debt\\ 14295 14124 13 , 807 14 , 330 15 , 508 15 , 508 15 , 239 14 . 590 15, 029 13. 69 6 Other Liabilities & Deferred Taxes 13340 13282 13 , 722 13, 898 14 , 332 14 , 332 14 , 333 13 , 895 14. 058 14 , 480 Total Liabilities 63 , 246\\ $ 66 , 984 65. 307 64 , 189 66, 667 66, 667 61, 084 58, 535 59. 079 61. 683 Total Shareholders Equity\\ 19518 20, 511 20 , 068\\ 19 , 158 19. 433 19. 433 18 , 635 18 , 577 18 , 865 19. 816 Total Liabilities and Shareholders' Equity 82 , 764\\ $ 87 , 495 85, 375 83 , 347\\ 86 , 100 86 , 100 79, 719 77 , 112 77, 944 81, 499 EXHIBIT 6 ( continued ) Sep - 97 Jun - 97 Mar - 97 Dec - 96 Assets Cash 6, 486 6 , 867 6, 463 8 , 137 5 $ Receivables , Inventory and Pre- Paids 31 , 704 31 , 778 30 , 857 32, 558 Total Current Assets $ 38, 190 $ 38 , 639\\ 17 , 921 37 , 320 $ 40, 695 Property & Equipment ( net ) 17 , 647 17 , 062 17 , 407 Investments and Other Assets 22 , 182 22, 533 22 , 145 $ 78 , 819 76 , 527 23 , 030 Total Assets\\ $ 78, 293 81 , 132 Liabilities and Shareholders' Equity Accounts Payable , Taxes & Accruals* $ 18 , 072 18 , 531/ $ 17 , 998 21 , 04 : Debt Maturing within One Year* 12.518 14, 028 13 , 243 12 , 95 7 Total Current Liabilities 30 , 590 32, 559 31 , 241 34 , 000 Long Term Debt\\ 13 , 623 11 , 675 10.402 9 , 872 Other Liabilities & Deferred Taxes 14 , 324 14 , 476 14 , 933 15 , 632 Total Liabilities 58 , 537 58 , 710 56. 576 59, 504 Total Shareholders Equity* 19 , 756 20 , 109 19 . 951 21 , 628 Total Liabilities and Shareholders' Equity 78 , 293| 78, 819 76. 527 81 , 132