Question: All answers are wrong except Financial Leverage 5.12 is correct, please help. WRONG are: a) ROE 90%, a) ROA 18%, b) Profit margin 8%, and

All answers are wrong except Financial Leverage 5.12 is correct, please help. WRONG are: a) ROE 90%, a) ROA 18%, b) Profit margin 8%, and b) asset turnover 214 are all wrong answers. ONLY correct answer was a) Financial Leverage 5.12

Apply DuPont Disaggregation of ROE Selected balance sheet and income statement information for Home Depot follows.

$ millions Jan. 31, 2016 Feb. 01, 2015
Operating assets $40,683 $38,573
Nonoperating assets 2,266 1,773
Total assets 42,949 40,346
Operating liabilities 15,043 13,552
Nonoperating liabilities 21,275 17,157
Total liabilities 36,318 30,709
Total stockholders' equity 6,631 9,637
Sales 89,234
Net operating profit before tax (NOPBT) 12,124
Nonoperting expense before tax 803
Tax expense 4,001
Net income 7,320

Round answers to two decimal places (ex: 0.12345 = 12.35%)

a. Compute ROE and disaggregate the ratio into its DuPont components of ROA and financial leverage. ROE: Answer

% ROA: Answer

% Financial leverage: Answer

b. Disaggregate ROA in to profitability and productivity components. Profit margin Answer

% Asset turnover Answer

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