Question

Income Statement
Sales/Revenue
Total revenue	76,480,000,000
Cost of Revenue	25,110,000,000
Gross Profit	51,370,000,000
Operating Exp	31,810,000,000
Selling General & Admin	-
Other Operating Expense	3,390,000,000
Unusual Expense	16,180,000,000
EBIT after Unusual Expense	2,130,000,000
Non Operating Income/Expense	385,000,000
Equity in Affiliates (Pretax)	1,020,000,000
Interest Expense	17,670,000,000
Pretax Income	16,370,000,000
Other After Tax Income (Expense)	1,300,000,000
Consolidated Net Income	-
Minority Interest Expense	1,300,000,000
Net Income	-
Discontinued Operations	1,300,000,000
Net Income After Extraordinaries	-
Preferred Dividends	1,300,000,000
Net Income Available to Common	480,000,000

Balance Sheet
Assets
Cash & Short Term Investments	$ 18,300,000,000.00
Total Accounts Receivable	$ 13,490,000,000.00
Inventories	$     8,770,000,000.00
Other Current Assets	$     2,540,000,000.00
Total Current Assets	$ 43,090,000,000.00
Net Property, Plant & Equipment	$ 17,010,000,000.00
Total Investments and Advances	$        751,000,000.00
Long-Term Note Receivable	-
Intangible Assets	$ 85,130,000,000.00
Other Assets	$     4,220,000,000.00
Total Assets	$157,300,000,000.00
Liabilities & Shareholders' Equity
Accounts Payable	$     7,310,000,000.00
Income Tax Payable	$     1,850,000,000.00
Other Current Liabilities	$ 17,470,000,000.00
Total Current Liabilities	$ 30,540,000,000.00
Long-Term Debt	$ 30,680,000,000.00
Stockholders' Equity
Other Liabilities	$ 17,490,000,000.00
Total Liabilities	$ 97,140,000,000.00
Common Equity (Total)	$ 60,160,000,000.00
Total Shareholders' Equity	$ 60,160,000,000.00
Total Equity	$ 60,160,000,000.00
Liabilities & Shareholders' Equity	$157,300,000,000.00

Current Ratio	$               1.41
Inv Turnover	$               8.72
Total asset turnover	$               0.49
Debt Ratio	$               0.19
Debt to Equity ratio	$               1.61

6.  Basic earning power

7. ROE

8. P/E Ratio

9. Market to Book Ratio

10.  The Dupont Equation:

We decompose the ROE into three ratios:

ROE = (Net profit margin) (Total asset utilization)(Equity Multiplier)

Answer 1

6)Basic earning power= EBIT/total assets
=2130000000/157300000000=1.35%
7)ROE=net income/equity
=480000000/60160000000=0.80%
8)P/E ratio= price per share/earning per share
=
9)Market to book ratio= price per share/book value per share
=

8 and 9 can not be found since market price per share not given
10)ROE=(net profit margin)*(total asset util)*(equity multiplier)
=(net profit/sales)*(sales/assets)*(assets/equity)
=(480000000/76480000000)*(76480000000/157300000000)*(157300000000/60160000000)
=(0.63%)*(0.49)*(2.61)
=0.80%