(Solved): Analysis and Interpretation of Ratios When RNOA Exceeds ROE Refer to the balance sheets and income ...

Analysis and Interpretation of Ratios When RNOA Exceeds ROE Refer to the balance sheets and income statement below for Facebook Inc. FACEBOOK INC. Consolidated Balance Sheet \begin{tabular}{|l|r|r|} \hline \multicolumn{1}{|c|}{ At December 31,5 millions } & 2018 & 2017 \\ \hline Current assets & & \\ \hline Cash and cash equivalents & $$\$10,019$$ & $$\$8,079$$ \\ \hline Marketable securities & 31,095 & 33,632 \\ \hline Accounts receivable, net & 7,587 & 5,832 \\ \hline Prepaid expenses and other current assets & 1,779 & 1,020 \\ \hline Total current assets & 50,480 & 48,563 \\ \hline Property and equipment, net & 24,683 & 13,721 \\ \hline Intangible assets, net & 1,294 & 1,884 \\ \hline Goodwill & 18,301 & 18,221 \\ \hline Other assets & 2,576 & 2,135 \\ \hline Total assets & $$\$97,334$$ & $$\$84,524$$ \\ \hline Current liabilities & & \\ \hline Accounts payable & $$\$820$$ & $$\$380$$ \\ \hline Partners payable & 541 & 390 \\ \hline Accrued expenses and other current liabilities & 5,509 & 2,892 \\ \hline Deferred revenue and deposits & 147 & 98 \\ \hline Total current liabilities & 41,981 & 33,990 \\ \hline Other liabilities & 84,127 & 74,347 \\ \hline Total liabilities & $$\$97,334$$ & $$\$84,524$$ \\ \hline Stockholders' equity & $$22\%$$ & \\ \hline Common stock and additional paid-in capital & 3,760 \\ \hline Accumulated other comprehensive loss & 6,190 & 6,417 \\ \hline Retained earnings & 13,207 & 10,177 \\ \hline Total stockholders' equity & 40,584 \\ \hline Total liabilities and stockholders' equity & $$(227)$$ \\ \hline Combined federal and state statutory tax rate & & \\ \hline & & \\ \hline \end{tabular} a. Compute net operating profit after tax (NOPAT) for 2018. Assume that the combined federal and state statutory tax rate is $$22\%$$. Hint: Carefully consider whether nonoperating expense is positive or negative. b. Compute net operating assets (NOA) for 2018 and 2017. c. Compute RNOA and disaggregate it into net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2018. d. Compute return on equity (ROE) for 2018