Need an interpretation explanation for the below answer.

Part A)

The return on assets can be calculated with the use of following formula:

Return on Assets = Net Income/Total Assets*100

Using the information available from the link for the Year 2015, we get,

Return on Assets = -133,754/421,694*100 = -31.72%

________

Part B)

The return on assets can be disaggregated with the use of Dupont formula for ROA as follows:

Disaggregating ROA = Profit Margin Ratio*Asset Turnover Ratio

Where Profit Margin = Net Income/Sales

and Asset Turnover = Sales/Total Assets

Using the information available from the link for the Year 2015, we get,

Disaggregating Return on Assets = -133,754/279,738*279,738/421,694 or -.48*.66 = -31.72% (there can be minor difference in answer on account of rounding off values)

________

Part C)

The return on equity can be calculated with the use of following formula:

Return on Equity = Net Income/Stockolder's Equity*100

Using the information available from the link for the Year 2015, we get,

Return on Equity = -133,754/374,954*100 = -35.67%

________

Part B)

The return on equity can be disaggregated with the use of Dupont formula for ROE as follows:

Disaggregating ROE = Profit Margin Ratio*Asset Turnover Ratio*Equity Multiplier

Where Profit Margin = Net Income/Sales

Asset Turnover = Sales/Total Assets

Equity Multiplier = Total Assets/Total Stockholder's Equity

Using the information available from the link for the Year 2015, we get,

Disaggregating Return on Equity = -133,754/279,738*279,738/421,694*421,694/374,954 or -.48*.66*1.12 = -35.67% (there can be minor difference in answer on account of rounding off values)