[Question 2] The following Balance Sheet was reported for GE for fiscal years 2014 to 2016 (all figures in USD million):

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Question 2 The Following Balance Sheet Was Reported For Ge For Fiscal Years 2014 To 2016 All Figures In Usd Million 1 (54.99 KiB) Viewed 22 times

[Question 2] The following Balance Sheet was reported for GE for fiscal years 2014 to 2016 (all figures in USD million): 2016 2015 2014 2016 2015 2014 Current liabilities Noncurrent assets Property, Plant, and Equipment Goodwill and intangible assets 127 150 130 Accounts payable 1,259 1,238 1,101 3,025 3,443 3,554 130 141 Other operating assets 548 400 Accrued liabilities 98 Current portion of long- term debt 2,061 704 449 4,042 724 660 1.902 3,700 4,084 2,092 Current assets Cash and cash equivalents Accounts receivable 340 1,455 495 1,469 450 1,404 644 614 550 Noncurrent liabilities Debt Other operating liabilities 13 14 18 1,059 1,163 1,149 Inventories Derivative financial assets 64 45 30 1,699 1,703 1,808 1,777 2,196 1,872 2,023 1.902 2,385 Common equity Total liabilities and equity Total assets 5,572 6,065 5,986 5,572 6,065 5,986 GE's key figures from reformulated income statements are as follows (all figures in USD million): 2016 2015 Sales 6,455 4,993 NOPAT 1,298 1,248 Net financial expense after tax 45 4 Exceptional items after tax 534 150 Profit for the year 719 1,094 Required: a) Perform the DuPont analysis based on the average balances: Return on equity (ROE), return on net operating assets (RNOA), net operating profit margin (NOPM), asset turnover (ATO), spread, and financial leverage (FLEV) for 2015 and 2016. Briefly comment on the figure. (20 marks) b) Discuss the limitation(s) of basic ROE decomposition and how advanced ROE decomposition addresses the limitation(s). (10 marks)