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You are thinking about investing in Facebook Inc. and like to do some research about its profitability.

You are thinking about investing in Facebook Inc. and like to do some research about its profitability. Its latest financial statements show total equity of $74,374 million, revenues of $40,653 million, and net income of $15,920 million.  


a.      What are Facebook's net profit margin and return on equity?


b.      You find the industry average net profit margin of 23.38% and the industry average return on equity of 16.45%. Based on the information, do you find Facebook underperforming or outperforming in terms of profitability?

Top Answer

Part A Net Profit margin =39.16% Return On equity = 21.4% Part B... View the full answer

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