Apply the dupont disaggregation into return on assets

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Question - Disaggregate Traditional DuPont ROE

Selected balance sheet and income statement information for Oracle Corporation follows. (Perform the required computations from the perspective of an Oracle shareholder.

$ millions

May 31, 2015 May 31, 2014

Operating assets $56,535 $51,447

Non-operating assets 54,368        38,819

Total assets 110,903 90,266

Operating liabilities 19,847 18,722

Non-operating liabilities 41,958 24,097

Total liabilities 61,805 42,819

Total Oracle stockholders' equity 48,663 46,878

Total revenues 38,226

Operating income before tax 13,871

Non-operating expense before tax 1,037

Tax expense 2,896

Net income9,938

a. Compute return on equity (ROE).

b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage (FL).

c. Calculate the profitability and productivity components of ROA.

Reference no: EM131711388

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