OA	10,800	OL	1,800
NonOA	1,600	NonOL	600
		EQ	10,000
Total	12,400	Total	12,400

Required:

(i)Compute B/S items NOA and NNO.

NOA NNO

EQ:

Total: Total:

If NNO is negative, what does that mean? It means it is a net financial asset instead of being a netfinancial obligation

(ii) If RNOA =10% and NNEP =5%, construct the underlying I/S

NOPAT = ??

NNE = ??

NI = ??

Compute ROE

(iii) Verify that ROE=RNOA+[RNOANNEP]FLEV. FLEV = NNO/EQ

Compute RNOA as a weighted average of ROE and NNEP

Compute ROE as a weighted average of RNOA and NN

Only (iii) required. Can ignore (i) and (ii).

Thank you.