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Unformatted text preview: Econ 118–Sp’08–FINAL EXAM ANSWER KEY – p1 Econ 118–Financial Statement Analysis–Sp’08 Final Exam – 100 points ANSWER KEY All questions (except # 5) are based on the annual report of Pfizer Pfizer is the world's largest pharmaceutical company, producing a wide range of drugs. Patents on a number of Pfizer’s key products expire in the 2010-2012 period and to date no blockbuster drugs to replace them have emerged from Pfizer’s R&D pipeline. In December 2006, Pfizer sold its consumer products division to Johnson & Johnson for $16.6 billion in cash. The questions that follow are based on selected pages from Pfizer’s 2007 annual report, which are attached. Use year-end numbers where a formula calls for an average. The U.S. federal statutory income tax rate was 35% for all periods. Watch your plusses and minuses. Show all your work. Clearly label answers. Be sure to provide explanatory and interpretative comments where called for. Question 1 – Return on common equity (30 points) Compute return on equity for 2007 and 2006 and relate it to return on assets by disaggregation. Be sure to identify and explain the significance of Compute return on equity for 2007 and 2006 and relate it to return on assets by disaggregation....
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This note was uploaded on 09/10/2008 for the course ECON 118 taught by Professor Loster during the Summer '07 term at UCSB.
- Summer '07