Calculate the amount of net income to common shareholders

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Boston Scientific, a medical device manufacturer, reported net income (amounts in millions) of $1,062 on sales of $5,624 during Year 4. Interest expense totaled $64. The income tax rate was 35 percent. Average total assets were $6,934.5, and average common shareholders' equity was $3,443.5. The firm did not have preferred stock outstanding or minority interest in its equity.

a. Compute the rate of ROA. Disaggregate ROA into profit margin for ROA and assets turnover components.

b. Compute the rate of ROCE. Disaggregate ROCE into profit margin for ROCE, assets turnover, and capital structure leverage ratio components.

c. Calculate the amount of net income to common shareholders derived from the excess return on creditors' capital and the amount from the return on common shareholders' capital.

Reference no: EM13553576

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