Question
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 | $22,112 |
FACEBOOK 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 | $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 | $84,524 |
Use these financial statements to answer the requirements. Required ($ millions) a. Compute net operating profit after tax (NOPAT) for 2018. Assume that the combined federal and state statutory tax rate is 22%. $Answer b. Compute net operating assets (NOA) for 2018 and 2017. NOA for 2017: Answer NOA for 2018: Answer c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2018. Note: Do not round until your final answer. Note: For NOPM and RNOA, round final percentages to two decimal places (for example, enter 6.66% for 6.6555%). Note: For NOAT, round final amount to four decimal places (for example, enter 6.7756 for 6.775555).
NOPM | x | NOAT | = | RNOA |
Answer | x | Answer | = | Answer |
d. Compute return on equity (ROE) for 2018. Note: Do not round until your final answer. Note: Round final answer percentage to two decimal places (for example, enter 6.66% for 6.6555%). Answer%
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