The following information was reported by Yum Brands in its form 10-K. Use this information to...
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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 Dec. 31, 2018 $1,654 $1,902 844 5,041 Net income Interest expense, net Average total assets 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 + 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? 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 $1,654 $1,902 844 5,041 Net income Interest expense, net Average total assets 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 + 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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a The ratio that removes the effect of the companys financing decisions is the Return on Assets ROA ratio ROA measures how efficiently a company utilizes its assets to generate profits and it is calcu... View the full answer
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