Computing, Analyzing, and Interpreting Return on Equity and Return on Assets Following are summary financial statement data for Medtronic, plc for 2014 through 2016.

$ millions 2016 2015 2014 Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,833 $ 20,261 $17,005 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,538 2,675 3,065 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,782 106,685 37,943 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,063 53,230 19,443 Required

a. Compute the return on assets and return on equity for 2016 and 2015 (use average assets and average equity), together with the components of ROA (profit margin and asset turnover). What trends do we observe?

b. Which component appears to be driving the change in ROA over this time period?

c. Recompute the ROA and ROE for 2015 using year-end balances instead of averages. Use your results to explain why we typically use averages to compute ratios.

d. Medtronic repurchased a large amount of its common shares in 2016 at a cost of almost $2.83 billion.

How did this repurchase affect its return on equity?