Please help me find answer C and show the formula + math so that I can follow al

Question

Please help me find answer C and show the formula + math so that I can follow along. The answer is not 6.04%

Here are simplified financial statements for Phone Corporation in a recent year INCOME STATEMENT (Figures in $ millions) Net sales Cost of goods sold Other expenses Depreciation $13,193 4,060 4,049 2,518 Earnings before interest and taxes (EBIT) Interest expense $2,566 685 Income before tax Taxes (at 35%) $1,881 658 Net income Dividends $1,223 $ 856 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities Receivables Inventories Other current assets $89 158 2,490 238 932 2,382 187 867 Total current assets Net property, plant, and equipment Other long-term assets $ 3,525 19,973 4,216 3,818 19,915 3,770 Total assets $27,714$27,503 Liabilities and shareholders' equity Payables Short-term debt Other current liabilities $ 2,564 1.419 811 3,040 1,573 787 Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity $ 4,794 7.018 6,178 9,724 5,400 6,833 6,149 9,121 Total liabilities and shareholders' equity $27,714 $27,503 Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations. Round your percentage answers "Return on equity", "Return on assets", Return on capital" and "Operating profit margin" to 2 decimal places and the rest to 2 decimal places.) a. Return on equity (Use average equity.) b. Return on assets (Use after-tax operating income and average assets.) c. Return on capital (Use after-tax operating income and average capital.) d. Days in inventory (Use beginning inventory e. Inventory turnover (Use beginning inventory.) 12.90% 6.04 % 21.39 days 17.06

Explanation / Answer

Working:

Calculating after tax net operating income:

Calculating averge capital employed:

Return on capital = Net Operating profit after tax/Average capital = 1667.9/22511.5 = 7.41%

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