ROA must be calculated EWI/(average total assets)

EWI = net income + (interest expense x (1 - tax rate))

Profit margin was calculated/defined by my textbook as (EWI)/(sales revenue)

thank you!

Compute ROA, Profit Margin, and Asset Turnover Refer to the financial information for Target Corporation, presented below: Target Corporation Balance Sheets Page 353, January 28, 2018 2017 $2,643 8,657 1,264 $2,512 8,309 1,169 11,990 24,658 12,564 25,018 1,417 $38,999 783 $37,431 ($ millions) Assets Cash and cash equivalents Inventory Other current assets Total current assets Property and equipment, net Other noncurrent assets Total assets Liabilities and shareholders' investment Accounts payable Accrued and other current liabilities Current portion of long-term debt and notes payable Total current liabilities Long-term debt Deferred income taxes Other noncurrent liabilities Total shareholders' investment Total liabilities and shareholders' investment $8,677 4,254 270 13,201 11,317 713 2,059 11,709 $38,999 $7,252 3,737 1,718 12,707 11,031 861 1,879 10,953 $37,431 Income Statement Fiscal year ended February 3, 2018 $71,879 51,125 14,248 2,194 4,312 ($ millions) Sales revenue Cost of sales Selling, general and administrative expenses Depreciation and amortization Earnings from continuing operations before interest and income taxes Net interest expense Earnings from continuing operations before income taxes Provision for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net earnings (loss) 666 3,646 718 2,928 6 $2,934 a. Compute its return on assets (ROA) for the fiscal year ending February 3, 2018. Compute ROA using net earnings (loss). Assume a statutory tax rate of 25%. Round your answer to one decimal place. Use negative sign with answer, if appropriate. Return on Assets = (6.4) * % b. Disaggregate ROA into profit margin (PM) and asset turnover (AT). Round your answers to one decimal place. Use negative sign with answers, if appropriate. Profit Margin = (3.4) * % Asset Turnover = 1.9