Income Statements and Balance Sheets Follow for Microsoft Corporation

Short Answer

Income statements and balance sheets follow for Microsoft Corporation. Refer to these financial statements to answer the requirements.
Required:
a. Compute net nonoperating expenses (NNE) for 2016 and 2015. Assume that combined federal and state statutory tax rates are 37% for both years.
b. Compute net nonoperating obligations (NNO) for 2016 and 2015.
c. Compute Spread for 2016 and 2015. Return on net operating assets (RNOA) is 109.1% and 52.6% in 2016 and 2015, respectively. NNO were $(63,064) million in 2014.
d. Compute FLEV for 2016 and 2015. In 2014, net nonoperating obligations (assets) were $(63,064) million and shareholders' equity was $89,784 million.
e. Calculate return on equity (ROE) for both years. Show that ROE = RNOA + (FLEV × Spread). Interpret the year-over-year change in ROE.