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Washington2 Post 2011 balance sheet shows net operating profit margin (NOPM) of 4.2%, net operating asset turnover (NOAT) of

ROE is computed as:[E] O (Net income - Preferred dividends) / Average stockholders equity Income / Net sales RNOA + (FLEV ~

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Answer #1

ROE = RNOA + nonoperating return

= 4.3% - (4.2% × 1.75) = -3.05%

= -3.1 %

ROE = ( NET INCOME - PREFERRED DIVIDENDS)/AVERAGE STOCKHOLDERS EQUITY

ROE = RNOA + (FLEV × Spread )

Answer : A and C

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