Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Statement of income For Year Ended December 31, $ millions 2018 Revenue $55,838 Costs and expenses Cost of revenue 13,213 Research and development 10,273 Marketing and sales 7,846 General and administrative 3,451 Total costs and expenses 34,783 Income from operations 21,055 Interest and other income (expense), net 448 Income before provision for income taxes 21,503 Provision for income taxes Net income 3,249 $18,254 FACEBOOK INC. Consolidated Balance Sheet At December 31, $ millions Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net Goodwil Others Total assets Current liabilities Accounts payable Partners payable Accrued expenses and other current abilities Deferred revenue and deposits Total current liabilities Other liabilities Total liabilities Stockholders' equity Common stock and additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 2018 2017 $10,019 $11,937 34,953 33,632 11,445 9,690 1,779 1,020 58,196 56,279 24,683 17,579 1,294 5,742 22,159 18,221 2,576 2,135 $108,908 $99,956 $820 $380 4399 4,248 5,509 6,750 147 10,875 98 3,760 10,048 6,417 20,923 10,177 46,764 56,016 (760) (227) 41,981 33,990 87,985 89,779 $108,908 $99,956 22% Combined federal and state statutory tax rate a. Compute net operating profit after tax (NOPAT) for 2018. Assume that the combined federal and state statutory tax rate is 22%. Hint: Carefully consider whether nonoperating expense is positive or negative. NOPAT $ 16,772.34 x b. Compute net operating assets (NOA) for 2018 and 2017. Year 2018 $ NOA 43,013 2017 $ 44,210 c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2018. NOPAT $ Numerator Numerator NOPAT Denominator RNDA Average net operating assets (NOA) 21,404 x 1 43,611.5 49.08 % Denominater Revenue Denominator Average net operating assets (NOA) Numerator Revenue 55,838 $ d. Compute return on equity (ROE) for 2018. Net income Numerator NOPM 55,838 0% 0x NOAT Denominator ROE Average equity 18,254 $ = 88,882 20.54%