KLA-Tencor Corporation

Average Balance Sheet

Operating Assets $2,627,235.50

Nonoperating Assets $2,948,529

Operating Liabilities $1,518,371

Nonoperating Liabilities $2,583,930

Equity $1,473,464

Income Statement

Operating Expenses $2,499,507

Tax Expense $653,666

Interest Expense/Net $81,263

Net Income $802,265

E4-36. Compute and Compare ROE, ROA, and RNOA

Refer to the balance sheet and income statement information for

KLA-Tencor Corporation in E4-34.

a. Compute return on equity (ROE).

b. Compute return on net assets (ROA).

c. Compute return on net operating assets (RNOA).

d. Compare the three return metrics and explain what each one measures.