Question: Compute, Disaggregate and Interpret ROE and ROA Selected balance sheet and income statement information from Office Depot, Inc. follows ($ millions). Sales Interest expense Net
Compute, Disaggregate and Interpret ROE and ROA Selected balance sheet and income statement information from Office Depot, Inc. follows ($ millions).
| Sales | Interest expense | Net income | Total Assets | Stockholders' Equity | ||
|---|---|---|---|---|---|---|
| 2017 | 2017 | 2017 | 2017 | 2016 | 2017 | 2016 |
| $10,240 | $62 | $181 | $6,323 | $5,540 | $2,120 | $1,852 |
a. Compute the 2017 return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL). Use 35% as the incremental tax rate. Round answers to one decimal place (i.e., 0.2568 = 25.7%). Do not round until your final answer.
| ROE | Answer
|
| ROA | Answer
|
| ROFL | Answer
|
b. Disaggregate ROA into profit margin (PM) and asset turnover (AT). Round answers to one decimal place (i.e., 0.2568 = 25.7%). Do not round until your final answer.
| PM | Answer
|
| AT | Answer
|
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