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Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Statement of Income For Year Ended December 31, $ millions
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 . . . . . . 9.355 Research and development . . . 10,273 Marketing and sales . . . .. 7.846 General and administrative. . . 3,451 Total costs and expenses. . . . . 30,925 Income from operations . . . . . 24,913 Interest and other income (expense), net. . . 448 Income before provision for income taxes . 25.361 Provision for income taxes . . . . . . . 3,249 Net income . . . . . . . . $22,112FACEBOOK INC. Consolidated Balance Sheet At December 31, $ millions 2018 2017 Current assets Cash and cash equivalents. . . . $10,019 $ 8,079 Marketable securities . . 31,095 33,632 Accounts receivable, net. . .. 7,587 5,832 Prepaid expenses and other current assets 1,779 1,020 Total current assets . . ..... 50,480 48,563 Property and equipment, net . 24.683 13,721 Intangible assets, net . . . . . . . . . 1,294 1,884 Goodwill . . . . .. 18,301 18,221 Other assets . . . . 2,576 2,135 Total assets . . . $97.334 $84,524 Current liabilities Accounts payable . . S 820 380 Partners payable. . . . . .. . . 541 390 Accrued expenses and other current liabilities . 5,509 2,892 Deferred revenue and deposits. . .. 147 98 Total current liabilities . . 7.017 3,760 Other liabilities . . . .. 6,190 6,417 Total liabilities. . . 13,207 10,177 Stockholders' equity Common stock and additional paid-in capital . . . . . . . . . . 42,906 40,584 Accumulated other comprehensive loss. (760) (227) Retained earnings . . . . . . 41,981 33,990 Total stockholders' equity . . ... . 84,127 74,347 Total liabilities and stockholders' equity . . . . . $97,334 $84,524 Required a. Compute return on equity (ROE). b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage. c. Calculate the profitability and productivity components of ROA. d. Confirm the full DuPont disaggregation: ROE = PM x AT x FLStep by Step Solution
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