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Shareholders' Equity:
Preferred Stock $.10\$ .10 Par Value; 100 Shares Authorized, None Issued)
Common Stock

Question 10

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\begin{array} { l r r } \text { Long-term debt } & 7,709 & 8,508 \\ \text { Long-tern obligations under capital leases } & 2,307 & 2,092 \\ \text { Deferred income taxes and other } & 463 & 400 \\ \text { Minority interest } & 1,025 & 331 \end{array} Shareholders' equity: Preferred stock ( \$ .10 par value; 100 shares authorized, none issued) Common stock ( \$ .10 par value; 5,500 shares authorized, 2,285 and \begin{array}{lrr} 2,293 \text { issued and outstanding in X6 and X7, respectively) } & 228 & 229 \\ \text { Capital in excess of par value } & 547 & 545 \\ \text { Retained earnings } & 16,768 & 14,394 \\ \text { Foreign currency translation adjustment } & \underline{(400)}&\underline{(412)} \\ \quad \text { Total shareholders' equity }&\underline{17,143}&\underline{14,756} \\ \text { Total liabilities and shareholders' equity }& \underline{\$ 39.604} & \underline { \$ 37.541} \end{array} a. Calculate return on common equity (ROCE) for fiscal X4 and X7. Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (If you want to give students more guidance then ask to disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.) b. Compare and contrast the change in earnings per share to ROCE over this time period. \begin{array} { l r r } \text { Long-term debt } & 7,709 & 8,508 \\ \text { Long-tern obligations under capital leases } & 2,307 & 2,092 \\ \text { Deferred income taxes and other } & 463 & 400 \\ \text { Minority interest } & 1,025 & 331 \end{array} Shareholders' equity: Preferred stock ( \$ .10 par value; 100 shares authorized, none issued) Common stock ( \$ .10 par value; 5,500 shares authorized, 2,285 and \begin{array}{lrr} 2,293 \text { issued and outstanding in X6 and X7, respectively) } & 228 & 229 \\ \text { Capital in excess of par value } & 547 & 545 \\ \text { Retained earnings } & 16,768 & 14,394 \\ \text { Foreign currency translation adjustment } & \underline{(400)}&\underline{(412)} \\ \quad \text { Total shareholders' equity }&\underline{17,143}&\underline{14,756} \\ \text { Total liabilities and shareholders' equity }& \underline{\$ 39.604} & \underline { \$ 37.541} \end{array} a. Calculate return on common equity (ROCE) for fiscal X4 and X7. Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (If you want to give students more guidance then ask to disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.) b. Compare and contrast the change in earnings per share to ROCE over this time period.  Long-term debt 7,7098,508 Long-tern obligations under capital leases 2,3072,092 Deferred income taxes and other 463400 Minority interest 1,025331\begin{array} { l r r } \text { Long-term debt } & 7,709 & 8,508 \\ \text { Long-tern obligations under capital leases } & 2,307 & 2,092 \\ \text { Deferred income taxes and other } & 463 & 400 \\ \text { Minority interest } & 1,025 & 331 \end{array}
Shareholders' equity:
Preferred stock ( $.10\$ .10 par value; 100 shares authorized, none issued)
Common stock ( $.10\$ .10 par value; 5,500 shares authorized, 2,285 and
2,293 issued and outstanding in X6 and X7, respectively) 228229 Capital in excess of par value 547545 Retained earnings 16,76814,394 Foreign currency translation adjustment (400)‾(412)‾ Total shareholders’ equity 17,143‾14,756‾ Total liabilities and shareholders’ equity $39.604‾$37.541‾\begin{array}{lrr}2,293 \text { issued and outstanding in X6 and X7, respectively) } & 228 & 229 \\\text { Capital in excess of par value } & 547 & 545 \\\text { Retained earnings } & 16,768 & 14,394 \\\text { Foreign currency translation adjustment } & \underline{(400)}&\underline{(412)} \\\quad \text { Total shareholders' equity }&\underline{17,143}&\underline{14,756} \\\text { Total liabilities and shareholders' equity }& \underline{\$ 39.604} & \underline { \$ 37.541} \end{array}

a. Calculate return on common equity (ROCE) for fiscal X4 and X7. Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (If you want to give students more guidance then ask to disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.)

b. Compare and contrast the change in earnings per share to ROCE over this time period.

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