Porsche SE Group in millions 2018 2017

TA 33,708 31,576

Equity 33,416 31,292

Investments accounted for at equity 32,518 30,235

Result from Investments accounted for at equity 3,641 3,357

Revenue 103 34

Personnel Exp 77 31

Financial Result -3 -8

Result before tax 3,514 3,299

Result after tax 3,491 3,278

Earnings per ordinary share 11.39 10.70

Earnings per preference share 11.40 10.71

Net liquidity 864 937

Employees on 31 December 935 823

* NOTE: German notation of numerical data uses a "," instead of a "." as the decimal separator.

Further evaluation of the financial statements shows current liabilities of 102M in 2019, 133M in 2018, and 145M in 2017.

In the footnotes to the financial statements, Porsche indicates that R&D expenditures have been relatively stable in recent time periods. Porsche also follows IFRS rules whereby research costs are expensed as incurred and development costs are capitalized and amortized over lifespans of 2-15 years. As a result, you have concluded that no adjustments to either income or assets related to R&D are necessary to complete EVA calculations.

WACC 2018 2017

8.2% 8%

Required

1. Compute return on investment (ROI) using the DuPont formula, residual income (RI), and economic value added (EVA) for 2017 and 2018.
2. Briefly comment on the results.