Percentage difference between roa and adjusted roa

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Reference no: EM133378665

Compute ROA and Adjusted ROA

The following information was reported by Yum Brands in its form 10-K. Use this information to answer the requirements.

$ millions	Dec. 31, 2019	Dec. 31, 2018
Net income	$1,561	$1,809
Interest expense, net	751	763
Average total assets	4,948	4,988

a. Which ratio removes the effect of the company's financing decisions from the ratio? AnswerROAAdjusted ROA

b. Compute (i) return on assets, (ii) the adjusted return on assets, and (iii) the percentage difference in the measures for each year. Assume a statutory tax rate of 22%.

i. Compute return on assets (ROA) for 2018 and 2019

Note: 1. Select the appropriate numerator and denominator used to compute ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute ROA for each year.

ii. Compute adjusted return on assets (ROA) for 2018 and 2019

Note: 1. Select the appropriate numerator and denominator used to compute adjusted ROA from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute adjusted ROA for each year.

iii. Compute the percentage difference between ROA and adjusted ROA for 2018 and 2019

Reference no: EM133378665

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