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Compute the DuPont Disaggregation of ROE

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Refer to the balance s heets and in come statement be low for Facebook Inc.

a. Compute return on equity (ROE).
b. Apply the DuPont disaggregation into return on assets (ROA) and financial leverage.
c. Calculate the profitability and productivity components of ROA.
d. Confirm the full DuPont disaggregation: ROE= PM x AT x FL.

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Solution Summary

The solution is provided in excel with formulas showing how to calculate ROE as well as the different components of ROE using the DuPont formula.

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Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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