Cisco Systems has total assets of $35.841 billion, total debt of $9.112 billion, and net sales...

Cisco Systems has total assets of $35.841 billion, total debt of $9.112 billion, and net sales of $22.835 billion. Its net profit margin for the year is 20 percent, while the operating profit margin is 30 percent. What are Cisco’s net income, EBIT ROA, ROA, and ROE? (Enter amount in billion. Round net income to 3 decimal places, e.g. 25.335. Round EBIT ROA, ROA and ROE to 1 decimal place, e.g.12.2%.)

Net income	$	billion
EBIT ROA		%
ROA		%
ROE		%

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Expert Solution

Given about Cisco Systems,

Total assets = $35.841 billion

Total debt = $9.112 billion

Net sales = $22.835 billion

Net profit margin = 20%

Operatinf profit margin = 30%

So, Net income = net profit margin*Net sales = 20% of 22.835 = $4.567 billion

EBIT = Operating profit margin*Net sales = 30% of 22.835 = $6.8505 billion

So, EBIT ROA = EBIT/Total assets = 6.8505/35.841 = 19.1%

ROA = Net income/Total assets = 4.567/35.841 = 12.7%

Equity = Total assets - Total debt = 35.841 - 9.112 = $26.729 billion

So, ROE = Net income/Equity = 4.567/26.729 = 17.1%

jeff jeffy answered 2 years ago

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