Access the Form 10-K annual report of Kraft Foods Group Inc. Money amounts are r
ID: 2421301 • Letter: A
Question
Access the Form 10-K annual report of Kraft Foods Group Inc. Money amounts are reported in millions of dollars, You will need to use the following pages in the annual report to answer all the exam questions in this section: pages 34 to 38 - Financial statements and pages 39 to 70 - Notes to financial statements.
Kraft 10k form here: https://www.sec.gov/Archives/edgar/data/1545158/000154515815000018/krft10-k122714.htm
Calculate ROE for 2014. Show that the ROE value is the same using the disaggregated components - profit margin, asset turnover and financial leverage. Also, calculate adjusted ROA.
ROE =
ROA =
PROFIT MARGIN =
ASSET TURNOVER =
FINANCIAL LEVERAGE =
ADJUSTED ROA =
Explanation / Answer
ROE= net income/shareholder's equity
= 1043/4365 = 23.89%
ROA= net income/ average total assets
= 1043/((22947+23148)/2)
= 4.53%
Profit margin = net income/ revenue
= 1043/18205
= 5.73%
Asset turnover = sale revenue/ total assets
= 18205/22947
= 79.33%
Financial leverage = Debt/(Debt+equity)
= 8627/(8627+4365)
= .66