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The following information was reported by Yum Brands in its form 10-K. Use this information to answer the requirements. $ millions Dec. 31, 2019
The following information was reported by Yum Brands in its form 10-K. Use this information to answer the requirements. $ millions Dec. 31, 2019 Dec. 31, 2018 Net income Interest expense, net Average total assets $1,654 844 5,041 $1,902 856 5,081 a. Which ratio removes the effect of the company's financing decisions from the ratio? b. Compute (i) return on assets, (ii) the adjusted return on assets, and (iii) the percentage difference in the measures for each year. Assume a statutory tax rate of 22%. i. Compute return on assets (ROA) for 2018 and 2019 Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROA for each year. Year 2018 $ 2019 $ Numerator $ $ Denominator ROA % % ii. Compute adjusted return on assets (ROA) for 2018 and 2019 Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute adjusted ROA for each year. Year adjusted ROA Numerator Denominator 2018 $ 2019 $ $ $ % % iii. Compute the percentage difference between ROA and adjusted ROA for 2018 and 2019 Year % Difference 2018 2019 % % Are the two ratios materially different from each other?
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