Question

E E E E E E E E E E E EE E E E E Annual Data Millions of US $ except per share data 2011-09-30 2010-09-30 Cash On Hand $25,952 $25,620 Notes And Loans Receivable Inventory $776 $1,051 Other Current Assets $4,529 $3,447 Total Current Assets $44,988 $41,678 Property, Plant, And Equipment $7,777 $4,768 Long-Term Investments $55,618 $25,391 Goodwill And Intangible Assets $4,432 $1,083 Other Long-Term Assets $3,556 $2,263 Total Long-Term Assets $71,383 $33,505 Total Assets $116,371 $75,183 Total Current Liabilities $27,970 $20,722 Long Term Debt Other Non-Current Liabilities $10,100 $5,531 Total Long Term Liabilities $11,786 $6,670 Total Liabilities $39,756 $27,392 Common Stock Net $13,331 $10,668 Retained Earnings (Accumulated Deficit) $62,841 $37.169 Comprehensive Income $443 S-46 Other Share Holders Equity Share Holder Equity $76,615 $47,791 Total Liabilities And Share Holders Equity $116,371 $75,183

Please include steps. (calculate for 2010 & 2011)

Answer 1

Return on Equity = Net Profit / Equity

Decomposing as per Dupont = Net Profit Margin * Asset Turnover * Equity Multiplies

= (Net Profit / Revenue) * (Revenue / Total Assets) * (Total Assets / Total Equity)

Return on Equity = Net Profit / Equity

Also if we solve the below equation Total Assets will get squired off and similarly revenue so remaining will be only Net Profit / Equity which is same as Return on Equity.

= (Net Profit / Revenue) * (Revenue / Total Assets) * (Total Assets / Total Equity)

Note both the images belongs to balance sheet so I don't have revenue and net income balance but I have mentioned formulas to solve the question .. just need to insert values.

Thanks and have a good day