Computing and Disaggregating Return on Equity

Following are selected balance sheet and income statement information from a recent annual report on Form 10-K for Ralph Lauren Corporation.

Answer the following questions, rounding your answers to two decimal places (for example, enter .46 for .455558).

a. Calculate Ralph Laurens return on equity for the fiscal year ended April 2, 2016.

???

b. Disaggregate return on equity to its DuPont components of activity (profit margin), activity (asset turnover), and leverage (financial leverage). Demonstrate how the product of the components is equal to return on equity.

$ millions April 2, 2016 March 28, 2015 Income statement information: Sales $7,230 $7,451 Net income 396 702 Balance sheet information: Total assets 6,213 6,106 Total stockholders' equity 3,744 3,891 $ millions April 2, 2016 March 28, 2015 Income statement information: Sales $7,230 $7,451 Net income 396 702 Balance sheet information: Total assets 6,213 6,106 Total stockholders' equity 3,744 3,891