Question

Please help with the incorrect parts. Please show the process so I can follow how it was done.

Compute, Disaggregate, and Interpret Competitors' Rates of Return 600 Selected balance sheet and income statement information for the drug retailers CVS Health Corporation and Walgreen Co. follows. Assume tax rate of 35%. ($ millions) CVS Health Walgreen Sales revenue-2014 $139,367 $ 76,392 Interest expense-2014 156 Net income-2014 4,644 2,031 Total assets-2014 74,252 37,182 Total assets-2013 71,526 35,481 Stockholders' equity-2014 37,963 20,561 Stockholders' equity-2013 37,938 19,454 a. Compute the 2014 return on assets (ROA) for each company. (Round your answers to one decimal place.) CVS Health Walgreen ROA 6.4% x 5.6% x b. Disaggregate ROA into profit margin (PM) and asset turnover (AT) for each company. (Round your answers to one decimal place.) CVS Health Walgreen PM 3.3 % x 2.7% X AT 1.9 ~ 2.1 c. Compute the 2014 return on equity (ROE) and return on financial leverage (ROFL) for each company. (Round your answers to one decimal place.) CVS Health Walgreen ROE 12.2% 10.2% ROFL 192.1% x 181.6%

Answer 1

S millions sales revenue 2014 interest expense 2014 net income 2014 total assets 2014 total assets 2013 stockholders'equity-2014 stockholders'equity-2013 CVS Health 1,39,367 600 4,644 74,252 71,526 37,963 37,938 Walgreen Co 76,392 156 2,031 37,182 35,481 20,561 19,454 5034.00 2132.40 net income before interest exp = (net income +interest exp *1-tax rate average operating assets = opening assets+ending assets 1/2 average shareholders equity ANSWERS 72889.00 37950.50 36331.50 20007.50 ROA PM AT CVS Health 6.9% CVS Health 3.6% 1.9 CVS Health 12.2% 5.3% Walgreen Co 5.9% Walgreen Co 2.8% 2.1 Walgreen Co 10.2% 4.3% ROE ROFL formulas ROA= net income before interest exp/average operating assets *100 PM-net income before interest exp/sales 100 AT= sales / average operating assets ROE= net income average shareholders equity* 100 ROFL= ROE-ROA

since the answers are sensitive because of rounding off so please use comment box for the further clarification