Financial Leverage

Microsoft Corporation (MSFT) reported the following data (in millions) for a recent year:

Line Item Description	Amount
Sales	$ 168,088
Operating income	69,916
Average total assets	317,545
Average stockholders' equity	130,146

1. Compute the return on total assets. Round to two decimal places. fill in the blank 1 of 1%

2. Compute the return on stockholders' equity. Round to two decimal places. fill in the blank 1 of 1%

3. Compute the profit margin, asset turnover, and financial leverage metrics using the expanded DuPont formula. Round all calculations to two decimal places.

Line Item Description	Answer in percent
Profit margin	fill in the blank 3%
Asset turnover	fill in the blank 4
Financial leverage	fill in the blank 5
Return on stockholders' equity	fill in the blank 6%

4. Apple Inc. has a financial leverage metric of 5.25. Does Apple or Microsoft use more financial leverage in its operations?

AppleMicrosoft