Review Samsung’s in Appendix A and identify its
(a) Total assets as of December 31, 2017,and December 31, 2016,
(b) Operating profit for the year ended December 31, 2017.
Required
1. Assume Samsung’s target income is 12% of average assets. Compute Samsung’s residual income for 2017 using operating profit (in millions of Korean won).
2. Compute Samsung’s return on investment (in percent) for 2017 using operating profit. Round to two decimals.
3. Compute Apple’s return on investment (in percent) for fiscal 2017 using operating income (from Appendix A). Round to two decimals.
4. Using the answers for parts 2 and 3, which company (Samsung or Apple) had the higher return on investment?
Data from Samsung
