4. Determine FLEV and Spread and the noncontrolling interest ratio (if applicable). Show that: [RNOA + (FLEV x Spread)] x Noncontrolling interest ratio ROE Compare the components of the equation for each company over time and follow up on any differences. A В D Consolidated Balance Sheet USD ($) $ in Millions Dec. 31, 2018 1 increase or decrease % Current assets 2 $ 3,042 Cash and cash equivalents 3 0.88% Notes and accounts receivable, less estimated doubtful amounts 24,701 4 7.13% Inventories 5 Crude oil, products and merchandise 14,803 6 4.28% Materials and supplies 4,155 7 1.20% Other current assets 1,272 0.37% Total current assets Investments, advances and long-term receivables 40,790 10 11.78% Property, plant and equipment, at cost, less accumulated depreciation and depletion 247,101 11 71.38% 10,332 Other assets, including intangibles, net 12 2.98% Total assets 346,196 13 100.00% Current liabilities 14 Notes and loans payable 17,258 15 4.99% Accounts payable and accrued liabilities 37,268 16 10.77% Income taxes payable 2,612 17 0.75% Total current liabilities 18 Long-term debt 20,538 19 5.93% Postretirement benefits reserves 20,272 20 5.86% Deferred income tax liabilities 27,244 21 7.87% Long-term obligations to equity companies 4,382 22 1.27% Other long-term obligations 18,094 23 5.23% Total liabilities 147,668 24 42.65% Commitments and contingencies 25 Equity 26 Common stock without par value (9,000 million shares authorized, 8,019 million shares issued) 15,258 27 4.41% Earnings reinvested 421,653 28 121.80% Accumulated other comprehensive income (19,564) 29 -5.65% (225,553) Common stock held in treasury (3,782 million shares in 2018 and 3,780 million shares in 2017) 30 -65.15% ExxonMobil share of equity 31 Noncontrolling interests 6,734 32 1.95% Total equity 198,528 33 57.35% $ 346,196 Total liabilities and equity 34 100.00% 35 36
4. Determine FLEV and Spread and the noncontrolling interest ratio (if applicable). Show that: [RNOA + (FLEV x Spread)] x Noncontrolling interest ratio ROE Compare the components of the equation for each company over time and follow up on any differences. A В D Consolidated Balance Sheet USD ($) $ in Millions Dec. 31, 2018 1 increase or decrease % Current assets 2 $ 3,042 Cash and cash equivalents 3 0.88% Notes and accounts receivable, less estimated doubtful amounts 24,701 4 7.13% Inventories 5 Crude oil, products and merchandise 14,803 6 4.28% Materials and supplies 4,155 7 1.20% Other current assets 1,272 0.37% Total current assets Investments, advances and long-term receivables 40,790 10 11.78% Property, plant and equipment, at cost, less accumulated depreciation and depletion 247,101 11 71.38% 10,332 Other assets, including intangibles, net 12 2.98% Total assets 346,196 13 100.00% Current liabilities 14 Notes and loans payable 17,258 15 4.99% Accounts payable and accrued liabilities 37,268 16 10.77% Income taxes payable 2,612 17 0.75% Total current liabilities 18 Long-term debt 20,538 19 5.93% Postretirement benefits reserves 20,272 20 5.86% Deferred income tax liabilities 27,244 21 7.87% Long-term obligations to equity companies 4,382 22 1.27% Other long-term obligations 18,094 23 5.23% Total liabilities 147,668 24 42.65% Commitments and contingencies 25 Equity 26 Common stock without par value (9,000 million shares authorized, 8,019 million shares issued) 15,258 27 4.41% Earnings reinvested 421,653 28 121.80% Accumulated other comprehensive income (19,564) 29 -5.65% (225,553) Common stock held in treasury (3,782 million shares in 2018 and 3,780 million shares in 2017) 30 -65.15% ExxonMobil share of equity 31 Noncontrolling interests 6,734 32 1.95% Total equity 198,528 33 57.35% $ 346,196 Total liabilities and equity 34 100.00% 35 36
Chapter5: Evaluating Operating And Financial Performance
Section: Chapter Questions
Problem 6DQ
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Determine flev and spread and the non controling interest ratio(in aplicable)
show:
ROE=[ROA+(FLEV X SPREAD)] X noncontroling interest ratio
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RNOA + FLEV X Spread X NCI Ratio = ROE
25.89% +FLEV X 24.37% X 1.0026 =50%
What is FLEV? Please show steps
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