a Screen Shot 2018-09-22 at 6.21.40 PM Search Compute and Compare ROE, ROA, and
ID: 2821097 • Letter: A
Question
a Screen Shot 2018-09-22 at 6.21.40 PM Search Compute and Compare ROE, ROA, and RNOA Selected balance sheet and income statement information for Oracle Corporation follows. (Perform the required computations from the perspective of an Oracle shareholder $ millions Operating assets Nonoperating assets Total assets May 31, 2015 May 31, 2014 $49,225 38,819 88,044 18,710 24,097 42,807 45,237 Screen Shot 2018-09-22 at 6.21.53 PM $54,313 54,368 108,681 19,835 41,958 61,793 46,888 38,214 13,816 1,037 3,868 8,911 a. Compute return on equity (ROE) Round answer to two decimal places (ex: 0.12345-12.35%) 19.35 Operating liabilities Nonoperating liabilities Total liabilities b. Compute return on net assets (ROA) Round answers to two decimal places (percentage ex: 0.12345-12.35%) 9.06 Total Oracle stockholders' equity C. Compute return on net operating assets (RNOA) Round answers to two decimal places (percentage ex: 0.12345-12.35%) Total revenues Operating income before tax Nonoperating expense before tax Tax expense Net income 31.44 Check You have correctly selected 2. a. Compute return on equity (ROE) Round answer to two decimal places (ex: 0.12345-12.35%) Partially correct Marks for this submission: 6.06/9.09 19.35Explanation / Answer
NOTE: The solution provided is only for the last part i.e c as the other two parts are already solved correctly by the question poster.
(c) Operating Assets 2015 = $ 54313 and Operating Assets 2014 = $ 49225
Operating Liabilities 2015 = $ 19835 and Operating Liabilities 2014 = $ 18710
Net Operating Assets 2015 = Operating Assets 2015 - Operating Liabilities 2015 = 54313 - 19835 = $ 34478
Net Operating Assets 2014 = Operating Assets 2014 - Operating Liabilities 2014 = 49225 - 18710 = $ 30515
Average Net Operating Assets = (34478 + 30515) / 2 = $ 32496.5
Net Income = $ 8911
Return on Net Operating Assets (RNOA) = (8911 / 32496.5) x 100 = 27.42 %
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